ENGRO CORPORATION LIMITED SUSTAINABILITY AND BEYONDEnGro’s desire to expand globally. Today, EnGro is a leading player with more than 40 years of experience providing innovative,

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ENGRO CORPORATION LIMITEDANNUAL REPORT 2016

SUSTAINABILITY AND BEYOND

ENGRO CORPORATION LIMITEDCOMPANY NO. 197302229H

29 INTERNATIONAL BUSINESS PARK

#08-05/06 ACER BUILDING TOWER B

SINGAPORE 609923

T +65 6561 7978

F +65 6561 9770

01 CORPORATE PROFILE

02 CHAIRMAN’S MESSAGE

04 DIRECTORS’ PROFILES

05 MANAGEMENT TEAM

06 CORPORATE STRUCTURE

07 REGIONAL FOOTPRINT

08 SINGAPORE & MALAYSIA: INTEGRAL CEMENT & READY-MIX CONCRETE

12 CHINA: SPECIALTY CEMENT

19 SINGAPORE & CHINA: SPECIALTY POLYMER

20 INVESTMENTS

21 CORPORATE SOCIAL RESPONSIBILITY

22 FINANCIAL HIGHLIGHTS

23 CORPORATE GOVERNANCE REPORT

43 FINANCIAL CONTENTS

129 SUPPLEMENTARY INFORMATION

130 STATISTICS OF SHAREHOLDINGS

132 NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

TABLE OF CONTENTS

REGISTERED OFFICE29 International Business Park#08-05/06 Acer Building Tower BSingapore 609923Tel: +65-65617978Fax: +65-65619770

SHARE REGISTRARBoardroom Corporate & Advisory Services Pte Ltd50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

AUDITORSKPMG LLPPublic Accountants and Chartered Accountants16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581

PARTNER-IN-CHARGELow Gin Cheng, Gerald (with effect from FY2016)

COMPANY SECRETARYJoanna Lim Lan Sim

EnGro was originally incorporated in 1973 as SsangYong Cement (Singapore) Pte Ltd, a tripartite joint venture involving SsangYong Cement Korea, DBS Bank and Afro Asia Shipping.

In 2005, the Company changed its name to EnGro with a new logo that reflects its vision on North Asia and growth through strategic partnerships. The striking blue and orange symbolises EnGro and its partners. The design simulates the hemisphere of a globe reflecting EnGro’s desire to expand globally.

Today, EnGro is a leading player with more than 40 years of experience providing innovative, eco-friendly, and high performance building materials to key projects in the region.

EnGro’s “Building Sustainability” tagline reflects its campaign to help the industry go green and achieve the triple bottom-line equilibrium of PEOPLE, PLANET, and PROFIT.

01ANNUAL REPORT 2016

CORPORATEPROFILE

FINANCIAL REVIEWIn the financial year ended 31 December 2016 (“FY2016”), EnGro Corporation Limited (“EnGro” or the “Group”) recorded a decline in revenue of 15.2 percent to S$153.3 million compared to FY2015, resulting from a continued slowdown in the Integral Cement and Ready-Mix Concrete (“RMC”) business. Despite lower revenue, the Group returned to profitability in FY2016 registering a net profit before tax of S$6.9 million against a net loss before tax of S$5.1 million in FY2015. The improved performance was attributed to the market turnaround in regions where our China GGBS (“Ground Granulated Blast Furnace Slag”) joint ventures (“JVs”) were located coupled with realisation of gains from disposal of financial assets. The Specialty Polymer business also witnessed a turnaround due to increased demand from the China automotive industry.

DIVIDENDThe Board is cautiously optimistic that China’s GDP growth is sustainable. With the confirmed new phase of infrastructure building, our China GGBS JVs should contribute positively to cushion any possible lacklustre performance by the Integral Cement and RMC business in Singapore. The Board is therefore recommending a first and final dividend of 2.5 cents per share to be declared for FY2016, subject to shareholders’ approval at the Annual General Meeting of the Company to be held on 28 April 2017.

BUSINESS REVIEWIn 2016, EnGro witnessed an overall improvement in its core businesses in both Singapore and China in terms of technical competency, productivity enhancement, networking cum partnership building. Against a backdrop of an eventful year which began with an anxiety over global economy as well as China’s financial markets threatening a hard-landing of its economy, followed by shockwaves disseminated by Brexit in June and culminated in an unexpected US presidential election outcome, EnGro’s business units proved to be versatile in returning to profitability.

(a) Integral Cement and Ready-Mix Concrete businessSingapore construction demand experienced a slowdown in year 2016 resulting from a re-scheduling of mega infrastructure projects plus continued weakness in the private residential sector. With the recently announced infrastructure projects added on, we expect civil engineering construction demand to boost total demand to between S$28 billion and S$35 billion in 2017.

2016 was a year of mixed results for EnGro’s RMC business. Top-Mix Concrete Singapore narrowed its losses, while Top-Mix Concrete Malaysia continues to pursue growth by extending geographical coverage and increase market share.

(b) Specialty Cement (GGBS) business in ChinaDespite moderate GDP growth of 6.7 percent in 2016, the highly focused restructuring plan for the steel and cement industries in China eventually led to a narrower gap in supply and demand. The on-going capacity rationalisation of the two industries should have a revitalising effect on the overall construction industry, evidenced by improved cement and steel prices end 2016.

Subsequent to a successful listing of our Wuhan Wuxin JV on the National Equities Exchange and Quotation (“NEEQ”) system or the New Third Board in November 2015, our Jinan Luxin JV followed the footsteps and became the second JV to be listed on the NEEQ system on 2 June 2016. The two events will pave way for EnGro to accelerate growth and to enhance value-add through “Building Excellence” in place of “Building Scale”.

All our GGBS JVs ended the year with improved performance, with the exception of our Tangshan Tanglong JV due to the perennial glut of steel capacity in Hebei province despite further capacity rationalisation introduced in Q4 2016. The combined performance of our GGBS JVs boosted total production to 8.1 million metric tons for the year out of an installed capacity of 10.2 million metric tons.

As per China Central Government’s plan to pursue sustainable GDP growth at 6.0 percent till 2020, it is generally perceived that the Central Government would speed up infrastructure spending and encourage consumer spending by lending support to the e-commerce and entrepreneurship drive.

In its plan to expand the High-Speed Railway network, an additional rail network of 10,000 kilometres will be added by 2020. Coupling the spinoff of the High-Speed Rail, it is envisaged to have a positive impact on EnGro’s GGBS business in China.

With improved operating environment and new business model introduced, our China GGBS business stands to improve further in 2017 although our Jinan Luxin JV is likely to witness a temporary decline. To ensure continuity of raw slag supply, one of its production lines will migrate to Rizhao, Shandong province, in conjunction with the relocation of Jinan Iron and Steel Group scheduled in Q4 2017.

(c) Specialty PolymerPursuant to our strategy of being closer to market, a new joint venture was formed to set up a manufacturing facility under the name Kunshan R&P, which was set up in Kunshan, Jiangsu province. Production commenced in

02 ENGRO CORPORATION LIMITED

CHAIRMAN’S MESSAGE

January 2017, and the polymer compounding capacity is expected to expand to 26,000 metric tons per annum by end of 2019.

Tapping beyond the borders of China, R&P’s Thermoplastic Polyolefin compound has been successfully qualified by two global major automotive players in Asia. It allows R&P to extend its reach to Japan, India, Thailand and Indonesia, witnessing a 114 percent increase in sales volume from a year ago. Indeed, 2016 may be regarded as the turnaround year for R&P.

(d) InvestmentsInvestments in our Singapore residential property in Sentosa continued to be impacted by the cooling measures introduced since 2009. The unsold units of Turquoise were rented out to generate rental income. In China, after 3 years of slow sales, the Tangshan Nanhu Eco-City started to show positive signs, with more than 80 percent of the Tangshan Nanhu Eco-City phase I units sold.

In 2016, our US venture capital (“VC”) investment exits were mainly via corporate acquisitions as the Initial Public Offering (“IPO”) window was relatively short and restricted. While mergers and acquisition exits will continue in 2017, IPO listing prospects are expected to improve and we expect our VC investment to ride this trend for a timely exit.

On our direct investments in local start-ups, Green Koncepts’ (“GK”) differentiated technology and continuous innovation attracted more partners to capitalise on its platform play strategy to gain momentum. GK’s prospects remain bright as its energy management solutions continue to generate tractions.

PROSPECTSSingapore being a small open economy, is experiencing a cyclical uplift, but the recovery is expected to be subdued between 1.0 and 3.0 percent GDP growth according to the Ministry of Trade and Industry. Upcoming mega infrastructure projects could lift our blended cement sales and call for high performance concrete sales by Top-Mix Singapore. Riding on economic growth in Southern Malaysia, Top-Mix Malaysia will continue to contribute positively to compliment our Singapore RMC business.

China continues to rebalance from investments to domestic consumption driven economy. Structural reforms to remove excess capacities have begun to show normalisation of selling prices of key building materials.

As evidenced by BAT (Baidu, Alibaba, Tencent) online giants, the advent of the digital economy in China will not only revolutionise the retail, financial, and logistics industries, it will in time to come pose threat to the building materials sector and related service industries. In recognition of this trend, we have embarked on a new initiative to address new challenges ahead. On One Belt One Road (OBOR) opportunities, our GGBS JVs with the advantages of coastal location would put us in good position to tap opportunities offered by the region.

In tandem with the prevailing Digital Economy in China, our “GGBS+” platform is beginning to take shape as our JVs broaden their product offering to include permeable concrete which is in demand by Sponge City projects in 16 pilot cities. We have positioned our GGBS as Green Cement, where Green Cement is a material of choice by Green Builders echoing the Chinese Government’s drive to end smog pollution plaguing its many cities.

In view of the densification of High-Speed Railway from building a grid of “4 horizontal by 4 vertical” to “8 horizontal by 8 vertical” by 2020, it bodes well for our GGBS business as we had pioneered the use of GGBS which went into the construction of concrete sleeper slabs for the Beijing-Shanghai High-Speed Railway. In addition, as more and more cities benefit from the advent of urbanisation, more GGBS will be in demand for urban infrastructures such as Mass Rapid Transport (MRT) and inter-city railway, expressway and airports over the next decade.

Lastly, China’s One Belt One Road (OBOR) strategy, the new opportunity for EnGro to draw on the power of its China GGBS JVs to join force along the Maritime Silkroad, offers medium-to long-term demand for Green Cement.

In view of the foregoing and despite the uncertain global economic outlook, we are cautiously optimistic of continued profitability in 2017.

ACKNOWLEDGEMENTOn behalf of the Board, I wish to offer my heartfelt thanks to everyone in the EnGro family – our customers, stakeholders, my fellow Directors and our Management team and staff for their continuing support, dedication and contributions.

TAN CHENG GAYChairman


TAN CHENG GAYChairman and Chief Executive Officer

Mr Tan is a stalwart of the Company, having been with EnGro Corporation since its inception. He was appointed as Director in 1973 and has since served as the Executive Director.

Mr Tan holds a Bachelor of Science (Honours) degree in Electrical and Electronic Engineering from University of London King’s College and a Master of Science in Electronic Engineering from University of Manchester Institute of Science and Technology, UK.

TAN YOK KOONExecutive Director

Mr Tan was first appointed as a non-independent director in 1974. In March 2005, he was appointed as the President of China Operations. He also serves as a member of the Nominating Committee. He is related to Mr Tan Cheng Gay.

Mr Tan holds a Bachelor of Law degree from University of London’s King’s College, London and a Master in Business Administration from Columbia University, New York.

SOH KIM SOONDirector

Mr Soh joined the board in 2002 as an independent and non-executive Director. Mr Soh is also the Lead Independent Director. He is the Chairman of the Nominating Committee and serves as a member of the Remuneration Committee and the Audit Committee.

Mr Soh is currently Chairman of ORIX Investment And Management Private Limited and ORIX Leasing Singapore Limited. He also serves on the board of Frasers Centrepoint Asset Management Ltd.

Mr Soh was previously Senior Managing Director of DBS Bank where he worked for more than 29 years.

Mr Soh holds a Bachelor of Arts (Honours) degree from the University of Singapore and is an Associate of the Chartered Institute of Bankers.

RONNIE TEO HENG HOCKDirector

Mr Ronnie Teo Heng Hock joined the board in January 2012 as an independent and non-executive director of the Company. He is the Chairman of the Remuneration Committee and serves as a member of the Nominating Committee and the Audit Committee.

He was previously the Managing Director of DBS Asset Management Ltd and General Manager of DBS Finance Limited. Mr Teo is concurrently a director of Berger International Private Limited and an independent director of Uni-Asia Holdings Ltd.

Mr Teo holds a Bachelor of Social Sciences (Honours) degree in Economics from the University of Singapore.

NG TAT PUNDirector

Mr Ng is an independent and non-executive Director. He joined the board in 2002 and is the Chairman of the Audit Committee and a member of the Remuneration Committee.

Mr Ng’s extensive experience in the banking and finance industry began when he started his career with Citibank in 1971. Since then, he has served in various senior positions with both foreign and local banks. From 1988 to 1997, he was Executive Vice President of OCBC Bank, Singapore, in charge of its International Banking and Financial Institutions business. In 1998, he was appointed the Executive Director and Chief Executive Officer of OCBC Bank, Malaysia. Mr Ng was also a Managing Director of JP Morgan Chase from 1999 to 2002, a Managing Director and subsequently a Senior Advisor at UBS AG from 2003 to 2008.

Mr Ng presently serves as an independent director and Audit Committee member of Thai Beverage Public Company Ltd. He is also the independent non-executive Chairman of Sing Investments & Finance Limited and the independent non-executive Chairman of SP Chemicals Holdings Ltd.

Mr Ng holds a Bachelor of Arts degree in Economics and History from the University of Singapore.


DIRECTORS’ PROFILES

HQ HEAD OF DEPARTMENTLEN CHENGChief Financial Officer

Mr Cheng oversees operations and performance of the Group. He has 20 years of financial management and public accounting experience in both multinational corporations as well as public-listed organisation in Singapore. Mr Cheng has a Bachelor of Accountancy from Nanyang Technological University, Singapore, and is a Chartered Accountant of Singapore.

LIM YEE CHUANGroup Financial Controller

Ms Lim oversees financial affairs of the Group. She has 20 years of experience in financial reporting and management in government-linked and public-listed companies in Singapore. Ms Lim is an ACCA graduate and a Chartered Accountant of Singapore.

WONG TOON HONGManager, Strategic Business Unit

Mr Wong oversees the Group’s venture capital hi-tech investments and specialty cement (GGBS) joint venture in Korea. His prior working experience were in sectors like defense, government, publishing, technology and business consulting for multinational companies in Asia Pacific. Mr Wong has a Bachelor of Engineering (Civil) from Nanyang Technological University and an MBA from the University of Surrey, UK.

VINCENT LOH Manager, Knowledge Management & Business Development

Mr Loh currently oversees the Group’s knowledge management, business development, and sustainability initiatives. He has 20 years of working experience in various industries. Mr Loh has a Bachelor of Business (Accounting) from Monash University, Australia, and is both a CPA Australia and a Chartered Accountant of Singapore.

INTEGRAL CEMENT & RMC OPERATIONSEUGENE HO Senior General Manager, Building Materials Division (Singapore)

Mr Ho oversees the Group’s integral cement and ready-mix concrete (“RMC”) business in Singapore and Malaysia. He has more than 30 years of working experience in the building materials industry and has held various senior positions in the major RMC companies. Mr Ho has a Master of Science (Honours) in Marketing from National University of Ireland, a Bachelor of Business (Business Administration) from Royal Melbourne Institute of Technology University, Australia, a Diploma in Civil Engineering from Singapore Polytechnic and a Diploma in Management Studies from Singapore Institute of Management (SIM).

SPECIALTY CEMENT OPERATIONSDR. CHEN EN YIGeneral Manager, Specialty Cement

Dr Chen oversees the Group’s specialty cement (GGBS) JVs in China. He has been working with the Company for 20 years. Prior to joining the Group, he lectured in Tsinghua University China, specialising in cement and concrete technologies. Dr Chen has a Bachelor of Engineering (Building Materials) from Chongqing University, a Master of Engineering (Civil) and Ph.D in Engineering (Civil) from Tsinghua University, China.

DR. LIM CHAN TENGManager, Business Development (China)

Dr Lim is a member of EnGro’s China business team. He has more than 40 years of working experience with responsibilities in process technology, facilities planning and development as well as design in a major oil company. Dr Lim has a Bachelor of Science (Chemical Engineering) from Nanyang University and a Ph.D (Chemical Engineering) from University of Manchester Institute of Science and Technology, UK.

SPECIALTY POLYMER OPERATIONSTAI BOON CHENManager, R&P (Pte) Ltd

Mr Tai oversees the business and operations of the Group’s specialty polymer unit (R&P). He has more than 30 years of working experience in operations management, plant restructuring, production management and technology transfer for local and multinational manufacturing companies.


MANAGEMENTTEAM

40% Tangshan Tanglong Materials Co Ltd

40% Tangshang Tang-Ang Materials Co Ltd

40% Jinan Luxin Materials Co Ltd

40% Jiangsu Hualong Materials Co Ltd

40% Wuhan Wuxin Materials Co Ltd

34.4% Qingdao Evergreen Materials and Technologies Co Ltd

40% VCEM Materials Co Ltd

100% Shanghai S3 Building Materials Co Ltd

100% Top-Mix Concrete Pte Ltd

100% Top Mix Concrete (Malaysia) Sdn Bhd

40% Changshu Chang Long Concrete Co Ltd

40% Changshu Chang Xin Ready Mix Concrete Co Ltd

40% Changshu Chang Yin Ready Mix Concrete Co Ltd

40% Xinshan Ang-de (Zibo) Materials Co., Ltd

98.57% R&P (Pte) Ltd

39.43% Kunshan R&P Co., Ltd

100% Sancam Investment Pte Ltd

100% SsangYong LTI Pte Ltd

100% Juniper Capital Vantures (Pte) Ltd

100% e-Invest Limited

30% HBS Investments Pte Ltd

30% Parliament View Developments Limited

20% HB Investments (China) Pte Ltd

10% Ho Bee Cove Pte Ltd

100% Tianjin Ang de Food & Beverages Management Co Ltd

Companies Incorporated in ChinaCompanies Incorporated in SingaporeCompanies Incorporated in Malaysia

Building Materials

Specialty Polymer

Investments

Property Development

Food & Beverage

GGBS

DRY MIX

RMC

Companies Incorporated in United KingdomCompanies Incorporated in South KoreaCompanies Incorporated in Hong Kong


CORPORATE STRUCTURE

SINGAPORE

FUJIAN

SHANGDONG

JOHOR

QUANZHOU

Headquarters

Manufacturing & Distribution

Overseas Office

QINGDAO

Bohai Rim Economic Zone

Yangtze River Delta Economic Zone

Central China

INCHEON

MALAYSIA

REGIONAL FOOTPRINT

JINGTANG PORT

TANGSHAN

BEIJING

SHANGHAI

KUNSHAN

CHANGSHU

HUAI’AN

JINAN

HUBEIWUHAN



SINGAPORE & MALAYSIA:INTEGRAL CEMENT & READY-MIX CONCRETE

Singapore construction demand slowed down in year 2016, as the total

construction demand moderated to a preliminary estimate of S$26.1 billion in

2016, from S$27 billion in 2015, due to re-scheduling of major projects such as

Deep Tunnel Sewage System Phase 2 (DTSS 2), Circle-line 6 and North-South

Corridor, as longer preparation time needed to implement these large-scale

projects. With the anticipation of these mega infrastructure projects, total civil

engineering construction demand is forecasted to increase from S$9.4 billion in

2016 to between S$11.3 billion and S$14.6 billion in 2017.

Against the backdrop of falling rental and rising vacancy, the outlook for private

residential demand remains challenging amid current economic conditions. Thus

total private residential construction demand is projected to stay soft at between

S$2.1 billion and S$2.9 billion in 2017 compared to S$3.1 billion in 2016. Total

industrial construction demand is projected to increase from S$3.3 billion in 2016

to between S$4.2 billion and S$5.6 billion in 2017, supported by government

effort to boost innovation and enhance land productivity in industrial space for

manufacturing and logistic industries. Some notable upcoming projects in 2017

include HDB Defu industrial City, JTC Logistic Hub @ Gul and 4th desalination

plant at Marina East.


According to the BCA Development Plans Survey conducted in Oct/Nov 2016 and assessment of prevailing market developments, the mid-point of 2017 total construction demand is forecasted at S$31.6 billion which is higher than the preliminary demand estimated for 2016. The total construction demand (excluding reclamation works) is projected to reach between S$28 billion and S$35 billion should all projects proceed according to the estimated award schedule.

In 2016, the total cement sales of EnGro were mainly attributed to demand from both public and private sectors comprising of cement supply to Housing Development Board (“HDB”) project, Thomson-East Coast MRT project, Changi Airport Runway project and supply contracts with various ready-mix concrete (“RMC”) companies.

EnGro continues to be at the forefront in research and development focusing on slag cement for stringent requirements which is increasingly challenging in the evolving construction sector. EnGro is committed to stay ahead by integrating the latest technology to maintain its leadership position in the industry. With this, EnGro shall continue to benefit from the anticipated increase in demand of blended cement for public infrastructure and ground improvement projects in coming years.

EnGro’s RMC subsidiary, Top-Mix Concrete Singapore faced a challenging year in 2016. The weak property market and subdued construction sector was a tough challenge to the RMC industry. As a result, Top-Mix Concrete Singapore suffered lower sales revenue and margin squeeze. To counter the adverse situation, Top-Mix Concrete Singapore stepped up supply of high performance concrete as differentiation strategy. In 2016, Top-Mix Concrete Singapore secured projects such as Selarang Park Complex, 8 Storey General Industrial Warehouse Building at Buroh Lane, expansion of KPE/TPE Interchange and various Government projects.

In Malaysia, Top-Mix Concrete Malaysia performed well in 2016 with steady growth riding on the growth in Johor Bahru and Iskandar Development Region (“IDR”). With its good reputation and proven track record, Top-Mix Concrete Malaysia has supplied to various key and sizable projects such as One Bukit Senyum, Country Garden-Danga Bay, Country Garden-Forest City, R&F Princess Cove & Marina Cove, Capital City, D’Pristine of MCT, Puteri Cove Resort and other projects in IDR. In 2017, Top-Mix Concrete Malaysia plans to scale up to capture more projects in Johor and is expected to perform well in 2017.


SINGAPORE & MALAYSIA:INTEGRAL CEMENT & READY-MIX CONCRETE

2012 2013 2014 2015 2016

Construction Demand, S$ billion 28.1 35.8 37.7 27.2 26.1

• Public Sector, S$ billion 9.3 14.8 19.7 14.0 15.8

• Private Sector, S$ billion 18.8 21.0 18.0 13.2 10.3

ENGRO’S EXTENSIVE RANGE OF ECO-FRIENDLY BUILDING MATERIALS HAD BEEN ACCORDED WITH SEC’S SINGAPORE GREEN LABEL SINCE 2007, AND SUBSEQUENTLY ALSO ACCORDED THE SGBC’S SINGAPORE GREEN PRODUCT LABEL ACCREDITATION


8PRODUCTS

4PRODUCTS

2PRODUCTS

EnGro’s Eco-Friendly Building Materials are awarded with SEC’s Green label Accreditation as well as the SGBC’s Singapore Green Product Label Accreditation

P4246S P197AP4246 P197B P197-4S

P8000PreFine 60/80

GGBS GREEN CONCRETE BLENDED CEMENT BLENDED CEMENT

2016 ENDED IN A CHEERFUL NOTE

China’s Gross Domestic Product (GDP) grew by 6.7 percent in 2016, down from 6.9 percent in 2015.

Though 6.7 percent growth was the lowest since 1990, it is still a decent start for the government’s newly

set goal of 6.0 percent annual GDP growth through to 2020.

In 2016, EnGro’s China GGBS (Ground Granulated Blastfurnace Slag) business began with a severe

hangover from year 2015 in which EnGro’s China GGBS business suffered its first ever loss. Against the

backdrop of China transitioning into a “new normal” economic growth pace, the path ahead is uncertain

as China continues to slow down due to a cooling property market and slow economic rebalancing of its

smokestack industry overcapacity. China’s pronounced efforts to cut domestic overcapacities in steel and

cement industries could directly impact our GGBS operations.


CHINA:SPECIALTY CEMENT

No encouraging news was in sight for most part of the year and our GGBS business was tough as selling prices remained humdrum and cheerless. Things began to lighten in the last quarter and sentiments turned better after several positive events took place, such as the clamping down of backward and polluting cement plants and steel mills as well as the introduction and strict enforcement of regulations preventing overloading of cement tankers. The sharp increase in cement prices was also sustained by increased demand towards the close of the year. With the exception of our Tanglong JV in Tangshan, where it suffers from a perennial supply glut, our other GGBS JVs performed better than planned. By overcoming eight months of miserable performance, the last quarter brought in a decent profit, enabling our GGBS business to exceed projections set for 2016. Our total GGBS production reached 8.1 million metric tons in 2016 out of 10.2 million metric tons of installed capacity, included the new contribution from Qingdao Evergreen Materials & Technologies Co., Ltd (“Evergreen”). This represents an increase of 9 percent over the year before, a new high.


MILESTONES ACHIEVED IN 20161) JINAN LUXIN LISTED ON THE NEW THIRD

BOARDFollowing the footstep of our Wuhan Wuxin JV, Jinan Luxin JV was successfully listed on the National Equities Exchange and Quotation (NEEQ) system or the New Third Board in 2016. On 2 June 2016, a bell ringing ceremony marking the debut of trading was attended by the senior management staff from both EnGro and Jinan Iron & Steel Group.

2) STRATEGIC PROGRAMMES IDENTIFIED IN 2014/15 TO TRANSITION FROM “BUILDING SCALE” TO “PURSUIT OF EXCELLENCE”:

● Zibo Duoshan Eco-friendly Green Cement Production ProjectOur inaugural Green Cement production plant in China leveraging on EnGro’s technical know-how and experience in marketing and application of low carbon high quality slag cements in Singapore, was completed and commissioned in late 2016, aimed at capturing the still nascent yet rising demand for Green Cement and Green Concrete in view of China’s commitment to tackle the severe pollution by the setting up of a National Carbon Market later this year.

● EnGro GGBS+ e-Commerce Project to promote Green Building products to a wider range of usersIn today’s digital economy, EnGro plans to leverage on its digital platforms to promote GGBS and other products, to a wider range of users across China. The driving force behind this is the hope that making our quality products to professionals and researchers will facilitate the sharing and educating of the people concerned of the performance and environmental benefits of using Supplementary Cementitious Materials, such as GGBS, fly ash, in cement blends. Through the digital platform, it is believed that the concept of green building materials will get a new pair of wings in getting market acceptance at a much faster pace.

3) WUHAN WUXIN PERMEABLE BRICK AND PAVEMENT CONCRETE MAKING PLANT

In anticipation of the new demand for permeable bricks and concrete pavement products in Wuhan, one of the

Bell ringing ceremony of Jinan Luxin listing on the New Third Board

pilot sponge cities in China, Wuhan Wuxin JV began building a permeable bricks and concrete making plant with capacity of 1 million cubic metres of permeable concrete products per annum. The plant is due for commissioning in March 2017, supplying to the ‘sponge city’ program at Qingshan District in Wuhan.

4) TWO PRODUCTION LINES STARTED OPERATION TO CAPTURE THE INCREASING LOCAL MARKET DEMAND FOR GGBS IN QINGDAO

With the successful commissioning of Qingdao Iron and Steel (“QDIS”) second blast-furnace in late October 2016, supply of raw slag from QDIS almost doubled. Since then Qingdao Evergreen JV has been able to run two production lines to capture the increasing demand in Qingdao for GGBS, thanks to the efforts made by the QDIS management in market development and brand building.

Duoshan Green Cement JV opening ceremony



FUJIAN

WUHAN

SHANGHAI

BEIJING

QINGDAO

ZHENGZHOU

XUZHOU

NANJING

FUZHOU

QUANZHOU

XIAMEN

JINGTANG

TIANJIN

VCEM MaterialsKorea

INCHEON

TANGSHAN

HUAI’AN

JINAN

SHIJAZHUANG

GROUND GRANULATED BLASTFURNACE SLAG (GGBS)

Yellow River

Yangtze River

Pearl River

GGBS JV Plant Annual Production (Metric tons p.a)

Tangshan Tanglong Materials Co., Ltd 1,200,000

Tangshan Tang-Ang Materials Co., Ltd 600,000

Jinan Luxin Materials Co., Ltd 2,400,000

Quanzhou Luxin Materials Co., Ltd 600,000

Jiangsu Huailong Materials Co., Ltd 1,200,000

Wuhan Wuxin Materials Co., Ltd 3,000,000

Qingdao Evergreen Materials and Technologies Co., Ltd 1,200,000

VCEM Materials Co. Ltd. (Korea) 500,000

Total GGBS Capacity 10,700,000


CHINA HIGH SPEED TRAIN NETWORK MAP

URUMQI

YINCHUAN

LANZHOUXINING

YAN’AN

TAIYUAN

HUHEHAOTE

DATONG

ZHANGJIAKOU

CHENGDU

CHONGQING

GUIYANG

NANNING

FANGCHENGGANG

BEIHAI

KUNMINGGUILIN

GUANGZHOU

ZHUHAIHONGKONG

MACAU

SHENZHEN

XIAMEN

FUZHOU

GANZHOULONGYAN

PUTIAN

CHANGSHA

SHAOYANG

YONGZHOU

NANCHANG

HANGZHOU NINGBOYICHANG

XIANGYANG

HUANGGANG

WANZHOUDAZHOU

SUININGQIANJIANG

ZHANGJIAJIE

CHANGDEYIYANG

XI’AN

HEFEI

FUYANG

WUHANANQING

JIUJIANG

ZHENGZHOU

SHIJIAZHUANG DONGYING

WEIFANGHENGSHUI

BAOTOU DALIAN

YANTAI

QINGDAO

QINHUANGDAO

TIANJIN

JINAN

LINYILIANYUNGANG

HUAI’ANYANCHENG

YANGZHOUNANTONG

HEZE

XUZHOU

BENGBU

SHANGQIU

NANJING

SHENYANG

DANDONG

CHANGCHUN

MANZHOULI

HAILARQIQIHAR

HARBIN

MUDANJIANGSUIFENHE

BEIJING

SHANGHAI

TAIPEI

SANYA

HAIKOU

ZHANJIANG

THE AIM OF THE PLANNED “8-VERTICAL, 8-HORIZONTAL” HIGH-SPEED RAILWAY NETWORK IS TO CRISSCROSS THE COUNTRY WITH EIGHT NORTH-SOUTH AND EIGHT EAST-WEST BULLET TRAIN LINES BY 2025,

COVERING 80 PERCENT OF CHINA’S MAJOR CITIES.

OUTLOOK 2017China’s economy is expected to show moderate growth this year due to a cooling property market and domestic economic rebalancing. During the recent National People’s Congress meeting in Beijing, Premier Li Keqiang announced that China will target its GDP growth at 6.5 percent for 2017. A key area of which is the government plans to invest RMB35 trillion to expand the China’s high-speed rail network by constructing another 10,000 kilometers by 2020, on top of the 20,000 kilometers currently in service. As a result, this would boost demand for our GGBS which had been used in the Beijing-Shanghai High Speed Railway project in the early years of China’s high speed railway development. This is a sign that the high speed railway effect on the China economy has been more than proven.

In addition to the projects and developments of central government, several pieces of positive news are likely to help drive GGBS demands: A five-year plan (2016-2020) was issued by the State Council on 5 January 2017, setting a goal to cut energy consumption by 15 percent in 2020 compared with 2015. Recycling economy will be promoted, with the government supporting resource recycling companies and encourage the use of low carbon materials.

China has resolutely determined to ban the use of inferior quality Ordinary Portland Cement (“OPC”) 32.5 grade cement, the main cause of overcapacity in the cement industry. By shutting down the production of OPC 32.5 grade cement, China’s total cement output would drop by 340 million metric tons per annum, accounting for 11 percent of the total output. The elimination of OPC 32.5 grade cement shall be replaced by the wide spread use of 42.5 grade cement, a higher grade cement, which can be easily and economically produced from our GGBS.



ONE BELT, ONE ROAD INITIATIVE

Europe(Baltic Sea)

MediterraneanSea

Russia

West Asia

South Asia

CHINA

Indian Ocean South-East Asia

Europe

CentralAsia

SouthPacific

SouthChina Sea

PersiaGulf

Silk Road Economic Belt

21st century Maritime Silk Road

THE OBOR INITIATIVE IS A GOOD PLATFORM THAT WILL SEE MORE OF OUR PRODUCTS BEING USED IN VARIOUS PROJECTS TO BE BUILT IN VARIOUS REGIONS COVERED

BY THE OBOR INITIATIVE.

THE NEW SILK ROAD ECONOMIC INITIATIVE OR ONE BELT, ONE ROADThe “New Silk Road Economic Belt” first expressed in Kazakhstan in 2013 and later the “21st-century Maritime Silk Road” announced in Indonesia by Chinese President Xi Jinping, jointly known as One Belt, One Road (OBOR), is China’s grand outwards economic collaboration by building a modern infrastructure network, connecting the old silk trade routes used centuries ago for carrying goods from China through Central Asia, Russia to Europe; and crossing by sea from coastal cities of China, transiting countries of South East Asia and then via the Straits of Malacca to reach East Asia countries and East Africa before reaching Europe via the Suez Canal.

Several major investments by China have already taken place. These include the China-Pakistan Economic Corridor, which is a collection of infrastructure projects currently under construction in Pakistan, worth US$54 billion. China has also roped in Bangladesh and Sri Lanka for its Maritime Silk Road initiative, creating a presence in the Indian Ocean Region. Recently, China’s OBOR strategy has pushed into Southeast Asia, crystallising several mega-developments in our neighborhood; they include: construction of a new S$14 billion off-shore trading port in Malacca, called the Melaka Gateway, scheduled to complete by 2025 and expansion of Kuantan Port in preparation for the S$17.8 billion construction of Malaysia’s East Coast Railway, financed by China and will begin in 2017. The 250-km line will connect ports on the east and west coasts of Peninsular Malaysia.


A VERY FLUID AND UNCERTAIN YEAR, BUT OPTIMISTIC CHINA GGBS WOULD DO REASONABLY WELLNotwithstanding all the positive announcements and developments mentioned above, 2017 will remain challenging for EnGro’s China GGBS business. The relocation of Jinan Iron and Steel mill to Rizhao announced last year will have a negative impact on Jinan Luxin JV’s operation as availability of blastfurnace slag will be drastically reduced. One of Jinan Luxin JV’s four slag grinding mills is being relocated to Rizhao Port along with Jinan Iron and Steel Group’s migration. The loss of production in Jinan may prove to be more than compensated as Jinan Luxin JV’s new location in Rizhao

Material for the 21st century

Value-add

Cost-effective

Eco-friendly

will allow it to elevate itself from a mere local supplier of GGBS to an the international market player.

Nevertheless, we shall continue to seek ways to cut cost, diversify our products and explore new areas for growth. In addition, we are actively and constantly looking out for local as well as international partners to expand our GGBS along the OBOR initiative. The overall positive development in the cement market resulting in GGBS price increases towards the close of year 2016 augurs well for our business; therefore, we remain cautiously confident that our China GGBS business will perform reasonably well in 2017.



In 2015, R&P transformed itself from a toll compounder for ExxonMobil Chemical (“EMC”) to an independent compounder supplying its Thermoplastic Polyolefin (“TPO”) to serve the automotive sector.

In 2016, the newly transformed R&P embarked on a growth path to expand its market share and win back former customers of EMC in China. Leveraging on its strong technical knowhow in manufacturing process and quality testing, R&P’s TPO were successfully qualified by two major automotive customers in Asia.

A point worth mentioning is in 2016, R&P secured a foothold to supply to customers outside China. By end of 2016, R&P’s TPOs were supplied to five countries in Asia, namely China, Japan, India, Thailand and Indonesia.

As a result, R&P’s sales volume grew by 114 percent from a year ago and the business turnaround in 2016. The surge in sales was supported by China sales as consumers rushed to take advantage of a tax incentive expiring by end of 2016. According to the China Association of Automobile Manufacturers (“CAAM”), China’s automotive market had a bumper year in 2016 as

sales grew by 13.7 percent. China’s automotive market, the world’s largest, grew to 28 million vehicles in 2016.

Despite 2016 being a bumper year in China’s automotive market, 2017 is expected to be a difficult one as the tax incentive has been rolled back amidst a slowdown of the broader Chinese economy. CAAM predicted that China’s automotive market is likely to grow by a modest 5 percent in 2017 to 29.4 million vehicles.

To better serve its existing and future customers in China, R&P established a joint venture in June 2016 with its Chinese partner Shanghai Hop Zenith Chemical Trading Co., Ltd, to build a new production facility in Kunshan city, Jiangsu province of China. The production capacity of the new facility is 26,000 metric tons and the first production line has commenced operation in January 2017.

To sustain its competitiveness, R&P will optimise its valued supply chain partnerships and strengthen its product design capabilities to widen its product grade slate in preparation to serve more automotive OEMs, and future vehicle platforms.

R&P Kunshan Production Plant


SINGAPORE & CHINA:SPECIALTY POLYMER

HI-TECH INVESTMENTSIn 2016, a total of US$69.1 billion was invested into 7,751 companies in the US venture capital (“VC”) industry. Although lower than 2015’s invested amount of US$78 billion, this is seem as a healthier and steadier pace of VC investing.

Going into 2017, the encouraging Initial Public Offering (“IPO”) pipelines lined up and the public markets’ positive reaction to the United States 2016 Presidential election results, bodes well for a good start into 2017.

Software companies continues to attract the bulk of venture investments at US$33 billion, being 48 percent of total invested capital. Emerging software verticals attracting investor interest are Artificial Intelligence, Robotics, Drones and Machine Learning.

On exit activities for 2016, most were via corporate acquisition as the IPO window had remained narrow with only 39 done. Recognising this, our VC fund managers responded to strategies leading to Mergers and Acquisition exits whenever the opportunity arises.

On our direct investments, Green Koncepts (“GK”) had continued to innovate to differentiate its technology offering. In recognising this, GK had been successful in signing up with more partners to engage in various go-to-market initiatives to capture commercial opportunities. The long term prospects remains positive and even more exciting when GK starts to expand into the region as more and more corporations recognise the need to adopt energy management solutions.

PROPERTY INVESTMENTThe unsold units of Turquoise in Sentosa have been leased out since Singapore Government’s cooling measures were introduced in 2009. Occupancy and rental rates have been reasonably good despite residential property market remaining soft.

In China, take up rate for Nanhu Eco City project in Tangshan, Hebei province has improved remarkably over the past one year as selling price moved up. We remain cautiously optimistic that the marketing of this high-end residential project, integrated with commercial and entertainment, cum riding on co-branding of Yanlord and Ho Bee Land, given time, will yield results especially under the latest Central Government policy of pushing for Beijing-Tianjin-Hebei corridor, Tangshan has been earmarked to become a garden city within this corridor.

Connected Devices on a Single Cloud Pla orm

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Air Condi�oningACMV | FCU / VRV

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IoT SensorsLux | Occupancy | Temperature

CCTV Systems

Fire Alarm Systems

BMS | BAS | PMS| Others

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Connecting the Urban Environment for Smarter Energy Management

KEM Pla�orm

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• Standard Data Taxonomy & Data Dic�onary

• Big Data Ready Datasets

Energe�x Solu�on Suite§ BEMS – Smart Building Energy

Management§ RightLUX – Smart Ligh�ng

Management§ DCiM – Smart Data Centre

Infrastructure Management

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Highly Scalable Cloud Infrastructure

Connected Devices on a Single Cloud Pla orm

Chiller PlantsSmart Metering Electricity |Water | Gas

Air Condi�oningACMV | FCU / VRV

Ligh�ngControls

IoT SensorsLux | Occupancy | Temperature

CCTV Systems

Fire Alarm Systems

BMS | BAS | PMS| Others

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Connecting the Urban Environment for Smarter Energy Management

KEM Pla�orm

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Highly Scalable Cloud Infrastructure


INVESTMENTS

ENGRO SCHOLARSHIP FOR STUDENTS OF SINGAPORE INSTITUTE OF TECHNOLOGY (“SIT”)

In June 2016, EnGro established an EnGro Scholarship program to support deserving undergraduates of the Singapore Institute of Technology (“SIT”) who are pursuing full-time degree programmes in the areas of sustainable infrastructure engineering and systems engineering offered by SIT.

ENGRO DONATION TO SCO

On 22 October 2016, the Singapore Chinese Orchestra (SCO) held its 20th Fundraising Gala Dinner and Concert. During the occasion, SCO Patron, Prime Minister Lee Hsien Loong thanked donors and partners such as EnGro by presenting them with an intricately-made mini Yanqing (蝴蝶琴) for its donation in support of SCO to be a world renowned Chinese orchestra with a uniquely Singaporean character.

STAYING IN TOUCH WITH STUDENTS PREVIOUSLY SPONSORED BY ENGRO TO ATTEND ‘THE MAYORS’ CLASS’ AT NATIONAL TECHNOLOGICAL UNIVERSITY

On 20 October 2016, EnGro organised a gathering in Huai’an between EnGro, Jiangsu Huailong senior management and Huai’an Chinese government officials, who were previously sponsored by EnGro to attend ‘The Mayors’ Class’ at National Technological University.

FACILITATING TAMPINES JUNIOR COLLEGE’SANNUAL CULTURAL IMMERSION PROGRAM

Since 2011, EnGro has been actively facilitating arrangements for students and teaching staff from Tampines Junior College (“TPJC”) to visit our Jinan Luxin （济南鲁新）GGBS JV’s production plant in Jinan, Shandong Province, as part of their annual twinning exchange programme with Jinan Experimental School. Jinan Luxin happily received a delegation of 27 TPJC students and teachers on 22 November 2016. The industrial visit provided them with an opportunity to understand how the GGBS is converted from a waste material to an environmental friendly product and used in construction projects, thus enabling them to appreciate what EnGro is doing to help create a sustainable, green and liveable environment.


CORPORATE SOCIAL RESPONSIBILITY

THREE-YEAR RESULTS AT A GLANCE

FY2014 FY2015 FY2016

Consolidated Statement of Comprehensive Income (S$’000)

Revenue 174,006 180,770 153,297

Profit/(loss) after tax 13,050 (5,445) 5,881

Profit attributable to owners 13,160 (5,283) 5,768

Statement of Financial Position (S$’000)

Total assets 268,862 262,793 253,882

Net assets value 227,998 223,451 219,208

Per Share (Cents)

Basic earnings 11.10 (4.45) 4.86

Net asset value 192 188 185

Net dividend 3.00 2.50 2.50

REVENUE (S$’000)

2014 174,006

2015 180,770

2016 153,297

PROFIT/(LOSS) ATTRIBUTABLE TO OWNERS (S$’000)

2014 13,160

2015 (5,283)

2016 5,768

TOTAL ASSET(S$’000)

2014 268,862

2015 262,793

2016 253,882

NET ASSET VALUE(S$’000)

2014 227,998

2015 223,451

2016 219,208

BASIC EARNINGS PER SHARE(cents)

NET ASSET VALUE PER SHARE(cents)

NET DIVIDEND PER SHARE(cents)

2014 192 2014 3.00

2015 188 2015 2.50

2016 185 2016 2.50

REVENUE OF ENGRO AND ASSOCIATES AND JOINT VENTURES# (S$’000)

2014 319,576

2015 295,318

2016 266,716

# Revenue of Associates and Joint Ventures is calculated based on percentage of interest EnGro has in the Associates and Joint Ventures. Numbers are for illustration purpose only.

2014 11.10

2015 (4.45)

2016 4.86


FINANCIALHIGHLIGHTS

EnGro Corporation Limited (the “Company”) is committed to achieving a high standard of corporate governance within the Company and its subsidiaries (the “Group”), to promote corporate transparency and to enhance shareholder value. This report describes the Company’s corporate governance processes and activities with specific reference to the Code of Corporate Governance 2012 (the “Code”) issued on 2 May 2012, which forms part of the continuing obligations of the Listing Rules of the Singapore Exchange Securities Trading Limited (“SGX-ST“).

The Company is generally in compliance with the principles and guidelines as set out in the Code and in areas where the Company deviated from the Code, appropriate explanation has been provided within this report. The Board considers that the alternative corporate governance practices are sufficient to meet the underlying objective of the Code.

BOARD MATTERS

The Board’s Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the long-term success of the company. The Board works with Management to achieve this objective and Management remains accountable to the Board.

Guidelinesof the Code Corporate Governance Practices of the Company

1.1 The Board’s principal functions include, among others, supervising the overall management and performance of the business and affairs of the Group and approving the Group’s corporate and strategic policies and direction.

1.2 All directors exercise due diligence and independent judgement, and are obliged to act in good faith and in the best interests of the Company.

1.3 To assist the Board in executing its duties, the Board has delegated specific functions to the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”) (together “Board Committees” and each a “Board Committee”). Each of these Board Committees has its own written terms of reference and its actions are reported to and monitored by the Board. Minutes of the Board Committee meetings are available to all Board members.

1.4 The Board has held meetings for particular and specific matters as and when required. A record of the directors’ attendance at meetings of Board and Board Committees for the financial year ended 31 December 2016 (“FY2016”), as well as frequency of such meetings, is set out in Table 1.

1.5 Matters which are specifically reserved for the Board’s approval include, among others, any material acquisitions and disposals of assets, any significant corporate matters and major undertakings (other than in the ordinary course of business). The Board dictates the strategic direction and management of the Group through quarterly review of the financial performance of the Group and the Company. In addition to establishing the limits of the discretionary powers of the officers and committees, the Board reviews the adequacy of risk management systems and internal controls.

1.6 New directors, upon appointment, are briefed on the business and organisation structure of the Company. There are update sessions to inform the directors on new legislation and/or regulations that are relevant to the Group.


CORPORATEGOVERNANCE REPORT

All Directors are provided with regular updates on changes in the relevant laws and regulations to enable them to make well-informed decisions and to ensure that the Directors are competent in carrying out their expected roles and responsibilities. The Directors are aware of the requirements in respect of disclosure of interests in securities, disclosure of conflicts of interest in transactions involving the Company, prohibition on dealings in the Company’s securities and restrictions on the disclosure of price-sensitive information.

The Company provides for all directors to attend appropriate courses, seminars and conferences for them to stay abreast of the relevant business developments.

1.7 A formal letter is sent to newly-appointed directors upon their appointment explaining their duties and obligations as director. New directors, upon appointment, will also be briefed on their duties and obligations as directors. The directors are also informed of regulatory changes initiated by or affecting the Company.

No new director was appointed during the year under review.

Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

Guidelines of the Code Corporate Governance Practices of the Company

2.1 The Board comprises five directors, two of whom are executive directors and three of whom are independent non-executive directors. There is an independent element on the Board, with independent directors constituting more than half of the Board.

A summary of the current composition of the Board and its committee is set out in Table 2.

2.2 Although the Chairman of the Board and the CEO of the Company is the same person, there is a strong independent element on the Board, with more than half of the Board comprising independent directors.

2.3 The NC, which reviews the independence of each director on an annual basis, adopts the Code’s definition of what constitutes an independent director.

2.4 Concerning the independence of Directors who have served on the Board beyond nine years, the Board had rigorously reviewed the performance, character and background of Mr Ng Tat Pun and Mr Soh Kim Soon (both being long serving and are familiar with the Company’s history, business as well as with management). Each of the aforesaid directors had exercised strong independent judgement in their deliberations in the interests of the Company and maintained their objectivity and independence at all times in the discharge of their duties as director. The Board is satisfied with the independence of character and judgement of both Mr Ng Tat Pun and Mr Soh Kim Soon notwithstanding their more than nine years of service on the Board.



The Board is aware of the need for progressive refreshing of the Board. Due to the complexity of the Group’s businesses, the retirement of its long serving directors will be paced to avoid an abrupt loss of members with the relevant experience.

2.5 The Board considers that the present Board size is appropriate, taking into account the nature and scope of the Group’s operation. The Board comprises directors who as a group provide core competencies, such as business and management experience, industry knowledge, financial and strategic planning experience and knowledge that are necessary and critical to meet the Group’s objectives.

2.6 The Board recognises the importance of an appropriate balance and diversity of skills, experience, gender, knowledge and professional qualifications in building an effective Board. To this end, the NC reviews the Board’s collective skills matrix regularly.

As a group, the directors bring with them a broad range of expertise and experience in areas such as accounting, finance, business and management experience, industry knowledge, strategic planning and customer-based experience and knowledge. The diversity of the directors’ experience allows for the useful exchange of ideas and views.

2.7 The non-executive directors aim to assist in the development of proposals on strategy by constructively challenging Management. The non-executive directors would also review the performance of Management in meetings.

2.8 Where warranted, the Non-Executive Directors meet without the presence of the executive directors or Management to review any matters that must be raised privately.

Chairman and Chief Executive Officer

Principle 3: There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company’s business. No one individual should represent a considerable concentration of power.


3.1 Mr Tan Cheng Gay currently fulfills the roles of Chief Executive Officer (the “CEO”) and Chairman of the Board (the “Chairman”). As the CEO, Mr Tan is supported by the management team to manage and oversee the overall operations and business performance of the Group. As Chairman, he sets the long-term vision, leadership and strategic direction for the Group.

The Board has not adopted the recommendation of the Code to have separate directors appointed as the Chairman and the CEO. This is because the Board is of the view that there is a sufficiently strong independent element on the Board to enable independent exercise of objective judgement on corporate affairs of the Group.

3.2 As the Chairman and CEO, he, with the assistance of the Company Secretary and Management, schedules Board meetings as and when required and prepares the agenda for Board meetings. In addition, he sets guidelines on and ensures quality, quantity, accurateness and timeliness of information flow between the Board, Management and shareholders of the Company. He encourages constructive relations between the Board and Management and between the executive directors and the independent directors. He also takes a leading role in ensuring the Company’s drive to achieve and maintain a high standard of corporate governance practices.



As Chairman, he is responsible for, amongst other things, exercising control over the quality, quantity and timeliness of the flow of information between the management of the Company (the “Management”) and the Board, and assisting in ensuring compliance with the Company’s guidelines on corporate governance.

3.3 The Board has appointed Mr Soh Kim Soon (“Mr Soh”), an independent and non-executive director, as the Lead Independent Director on 5 August 2013. Mr Soh will be available to address shareholders’ concerns when contact through the normal channels of the Chairman, the CEO or the Chief Financial Officer (or equivalent) has failed to provide a satisfactory resolution or when such contact is inappropriate.

3.4 Where warranted, the Lead Independent Director shall meet with the independent directors without the presence of Management or the executive directors to review any matters that must be raised privately before providing feedback to the Chairman of the Board.

Board Membership

Principle 4: There should be a formal and transparent process for the appointment and re-appointment of directors to the Board.


4.1 The NC, regulated by a set of written terms of reference, comprises two independent non-executive directors as well as an executive director. The lead independent director is the Chairman of the NC. The Board is of the view that the inclusion of an executive director in the NC would facilitate discussions at the NC meetings. The names of the members of the NC are disclosed in Table 2.

4.2 The principal functions of the NC is to establish a formal and transparent process for:

(a) reviewing nominations of new Director appointments based on selection criteria such as incumbent’s credentials and his skills and contributions required by the Company;

(b) reviewing and recommending to the Board the re-election of Directors in accordance with the Company’s Articles of Association;

(c) determining annually whether a Director is “independent”, guided by the independent guidelines contained in the Code;

(d) deciding whether a Director is able to and has adequately carried out his duties as a Director of the Company, in particular whether the Directors concerned have multiple board representations or if they are in conflict with the interest of the Company; and

(e) deciding how the Board’s performance may be evaluated and propose objective performance criteria.



4.3 The NC reviews annually the independent declarations made by the Company’s independent non-executive directors based on the criterion of independence under the guidelines provided in the Code. The NC has ascertained the independence of each director for FY2016 in accordance with the Code’s definition of independence and is satisfied that Mr Ng Tat Pun, Mr Soh Kim Soon and Mr Ronnie Teo Heng Hock remain as independent non-executive directors of the Company.

The Board having reviewed the performance, character and background of each independent non-executive director, considers Mr Ng Tat Pun, Mr Soh Kim Soon and Mr Ronnie Teo Heng Hock to be independent since they do not have any existing business or professional relationships with the Group or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent business judgment.

4.4 Notwithstanding that some of the directors have multiple board representations, the NC is satisfied that sufficient time and attention are being given by the directors to the affairs of the Company and each director is able to and has been adequately carrying out his duties as a Director of the Company.

The NC has decided not to fix a limit on the number of board representations of each director as it considers that the board representations presently held by its Directors do not impede the performance of their duties to the Company.

4.5 No alternate director has been appointed to the Board.

4.6 The NC is responsible for identifying and recommending new board members to the Board, after considering the necessary and desirable competencies of the candidates which include; (i) academic and professional qualifications; (ii) industry experience; (iii) number of other directorships; (iv) relevant experience as a director; and (v) ability and adequacy in carrying out required tasks.

The NC leads the process for board appointments and make recommendations to the Board. The integrated process of appointment includes:

i. developing a framework on desired competencies and diversity on board;ii. assessing current competencies and diversity on board;iii. developing desired profiles of new directors;iv. initiating search for new directors including external search, if necessary;v. shortlist and interview potential director candidates;vi. recommending appointments and retirements to the board;vii. election at general meeting.

4.7 Key information of each member of the Board can be found under the Directors’ Profile section of this Annual Report.

The date of the directors’ initial appointment and last re-election and their directorships are disclosed in Table 3.



Board Performance

Principle 5: There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board.


5.1 The NC is responsible for assessing the effectiveness and performance of the Board. The assessment parameters include the evaluation of the Board composition, size and expertise, timeliness of information flow and quality of information to the Board, Board pro-activeness, Board accountability and oversight, functioning of the Board Committees as well as standards of conduct. For FY2016, the NC reviewed the performance of the Board based on the aforesaid parameters.

5.2 The annual evaluation exercise provides an opportunity to obtain constructive feedback from each Director on whether the Board’s procedures and processes had allowed him to discharge his duties effectively and to propose changes which may be made to enhance the Board effectiveness as a whole as well as the efficiency and effectiveness of the Board Committees in assisting the Board.

5.3 The NC members were in consensus that there is no necessity to go through the formal process of evaluating their fellow director’s performance on an individual basis. There were no issue with fellow members’ regularity of attendance at meetings, their objectivity, competencies, time commitment and their readiness to contribute at meetings. Any disagreement between fellow directors would be ironed out at the Board meeting.

Although the Directors are not evaluated individually on a formal basis, the factors taken into consideration with regard to the re-nomination of Directors for the current year are based on their attendances, commitment of time and contributions made at meetings of Board and Board committees as well as general meetings.

Access to Information

Principle 6: In order to fulfill their responsibilities, directors should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.

Guidelines of the Code Corporate Governance practices of the Group

6.1 & 6.2 The members of the Board were provided with financial information, as well as relevant background information and documents relating to items of business to be discussed at a Board meeting before the scheduled meeting.

Apart from keeping the Board informed of all relevant new laws and regulations, the Company also has an on-going orientation program for non-executive Board members to familiarise and update themselves with the Group’s operations.



6.3 Directors have separate and independent access to the Company Secretary at all times. The Company Secretary attends all Board meetings, provides corporate secretarial support to the Board and ensures adherence to Board procedures and relevant rules and regulations which are applicable to the Company. The Company Secretary assists the Chairman by preparing meeting agendas, attending Board and Board Committee meetings and preparing minutes of board proceedings. Under the direction of the Chairman, the Company Secretary, with the support of the management staff, ensures good information flows within the Board and the Board Committees and between senior management and non-executive directors.

6.4 The appointment and removal of the Company Secretary is subject to the approval of the Board.

6.5 The Board (whether individually or as a group) has, in the execution of its duties, access to independent professional advice, if necessary, at the Company’s expense.

REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.


7.1 The RC, regulated by a set of written terms of reference, comprises three independent non-executive directors. The names of the members of the RC are disclosed in Table 2.

7.2 According to the terms of reference of the RC, the functions of the RC include, amongst others, the setting up and implementation of formal and transparent processes by which the remuneration packages of all the executive directors (in the form of service agreements) are formulated and approved. The RC has access to outside expert advice on all remuneration matters at the Company’s expense.

No director or member of the RC has been involved in deciding his own remuneration, except for providing information and documents specifically requested by the RC to assist it in its deliberations.

7.3 An independent remuneration consulting firm was engaged in 2013 to advise on the remuneration structure and process of the Group’s compensation systems, both at Company level and at individual level (i.e. the key executive level). In addition, the long term incentive schemes (share option schemes) of the Company were also reviewed.

7.4 According to the service agreement of the CEO:

i. the term of service shall continue until terminated by either party in accordance with the terms of the agreement; and

ii. there are no onerous compensation commitments on the part of the Company in the event of an early termination of the service of the CEO.



Level and Mix of Remuneration

Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company, and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.


8.1 ANNUAL REMUNERATION REPORT

REMUNERATION POLICY IN RESPECT OF EXECUTIVE DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL

The CEO’s remuneration include, among others, a fixed salary and a variable performance bonus, which is designed to align the CEO’s interests with that of the shareholders. The other executive director is paid a basic salary, overseas allowance and a variable performance bonus which is linked to his performance and the performance of the China operations. He is also paid a fee for being a member of the NC.

Based on the recommendation of the independent remuneration consulting firm, the RC has accepted and recommended to the Board the adoption of the performance measures, targets and hurdles for key management personnel.

8.2 The Company obtained shareholders’ approval in FY2011 to implement a performance share award scheme (called the “EnGro Corporation Limited Performance Share Award Scheme”) and an employee’s share option scheme (called the “EnGro Corporation Limited 2011 Employees’ Share Option Scheme”), where both schemes are administered by the RC. As at the date of this report, no award or share options have been granted to either the CEO or the other executive director, both of whom are entitled to participate in these two schemes subject to the rules and limits set out therein.

8.3 POLICY IN RESPECT OF NON – EXECUTIVE DIRECTORS’ REMUNERATION

In reviewing the recommendation for independent non-executive directors’ remuneration for FY2016, the RC had continued to adopt a framework of base fees for serving on the Board and Board Committees, as well as fees for chairing Board Committees and the role of Lead Independent Director. The fees take into consideration the amount of time and effort that each Board member may be required to devote to their role.

Save for directors’ fees, which have to be approved by the shareholders at every annual general meeting (“AGM”), the independent non-executive directors do not receive any other forms of remuneration from the Company.

8.4 In setting remuneration packages, the Company takes into consideration the remuneration and employment conditions within the same industry and in comparable companies, as well as the Group’s relative performance and the performance of the individuals.



Disclosure on Remuneration

Principle 9: Every company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company’s Annual Report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance.


9.1

Also Rules 1207(12) to 1207(15) of the SGX-ST Listing Rules

LEVEL AND MIX OF REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL (WHO ARE NOT ALSO DIRECTORS OR THE CEO) FOR THE YEAR ENDED 31 DECEMBER 2016

Although the remuneration of each director and the top five key management personnel are not fully disclosed, the Company discloses their remuneration in bands of S$250,000 and also discloses in aggregate the total remuneration paid to the directors and the top five key management personnel.

The compensation structure for the key management personnel of the Group consists of three key components – fixed salary, bonus and other benefits.

Table 4 and Table 4A sets out the breakdown of the remuneration of the directors and the top five key management personnel for FY2016, respectively.

9.2 & 9.3 Regarding the Code’s recommendation to fully disclose the remuneration of directors and the top five key management personnel, given the highly competitive environment it is operating in and the confidentiality attached to the remuneration matters, the Company believes that disclosing remuneration in bands of S$250,000 and disclosing in aggregate the total remuneration paid to the directors and the top five key management personnel provide sufficient overview of the remuneration of directors and the top five key management personnel.

9.4 REMUNERATION OF EMPLOYEES WHO ARE IMMEDIATE FAMILY MEMBERS OF A DIRECTOR OR THE CHIEF EXECUTIVE OFFICER

Save as disclosed in Table 4, there is no immediate family member (defined in the SGX-ST Listing Manual) as the spouse, child, adopted child, step-child, brother sister and parent) of a director or the CEO in the employment of the Company whose annual remuneration exceeded S$50,000 during FY2016.

9.5 The Circular to Shareholders containing the details of the EnGro Corporation Limited Performance Share Award Scheme and the EnGro Corporation Limited 2011 Employees’ Share Option Scheme are available to shareholders upon their request.

9.6 Matters which are required to be disclosed in the annual remuneration report have been sufficiently disclosed in this report under Principles 7, 8 and 9 and in the financial statements of the Company and the Group.



ACCOUNTABILITY AND AUDIT

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.


10.1 The Board is responsible for providing a balanced and understandable assessment of the Group’s performance, position and prospects when presenting quarterly and other price-sensitive public reports and reports to regulators (if required).

The Group prepares its financial statements in accordance with the Singapore Financial Reporting Standards (“SFRS”) prescribed by the Accounting Standards Council. The Company releases its quarterly and full-year financial results through announcements to the SGX-ST.

10.2 In its interim quarterly financial statements announcements, the Board provides a negative assurance statement confirming to the best of its knowledge that nothing had come to the attention of the Board which might render the financial statements false or misleading in any material aspect.

The Company has also procured undertakings from all its directors and executive officers in compliance with Listing Rule 720(1).

10.3 Management had provided each member of the Board with management accounts on a quarterly and monthly basis so that they will be better informed on how the Group and Company are performing. The CEO and the Chief Financial Officer (“CFO”) provide assurance to the Board on the integrity of these financial statements through a written representation.

RISK MANAGEMENT AND INTERNAL CONTROLS

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders’ interests and the company’s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.


11.1 The Group’s system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives. It can only provide reasonable and not absolute assurance against material misstatement or loss. During the year, the AC, on behalf of the Board and through the assistance of internal and external auditors, had reviewed the effectiveness of the Group’s material internal control systems, including financial, operational, compliance and information technology controls, as well as risk management policies and systems. The process used by the AC to monitor and review the effectiveness of the system of internal controls and risk management includes:–

(a) discussions with management on risks identified by management;



(b) the audit processes;

(c) the review of internal and external audit plans; and

(d) the review of significant issues arising from internal and external audits.

11.2 The Directors recognise that risk management is integral to the whole business of the Group. In 2013, the Company developed the risk identification and management framework with the assistance of a reputable consultant, following which management has been tasked with the responsibility of overseeing and regularly reviewing the Group’s internal controls, including financial, operational, compliance and information technology controls, as well as risk management policies and systems.

11.3 Based on the Group’s framework of management controls in place; the internal control policies and procedures established and maintained by the Group; the work performed by the internal and external auditors and the documentation on the Group’s key risks referred to above, reviews performed by Management, the AC and the Board, the Board with the concurrence of AC is of the opinion that the risk management and internal control systems within the Group, addressing the financial, operational, compliance and information technology risks, are adequate and effective as at 31 December 2016.

Also Rule 1207(10) of the SGX-ST Listing Rules

For the financial year under review, the CEO and the CFO have provided assurance to the Board that the financial statements give a true and fair view of the Group’s business operations and finances and the Group’s risk management and internal control systems in place are adequate and effective in addressing the material risks in the Group in its current business environment including financial, operational, compliance and information technology.

11.4 As the Company does not have a Risk Management Committee, the Board, AC and Management assume the responsibility of the risk management function. Management reviews regularly the Group’s business and operational activities to identify areas of significant risks as well as appropriate measures to control and mitigate these risks. Management reviews all significant policies and procedures and highlights all significant matters to the Board and the AC.

AUDIT COMMITTEE

Principle 12: The Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties.


12.1 The AC, regulated by a set of written terms of reference, comprises three members, all of whom are Independent Non-Executive Directors. The names of the members of the AC are disclosed in Table 2.

12.2 The AC has three members namely Mr Ng Tat Pun, Mr Soh Kim Soon and Mr Ronnie Teo Heng Hock, who have accounting or related financial management expertise or experience.

12.3 The AC has full access to and full co-operation of the Management and external auditors. It also has the full discretion to invite any director or executive officer to attend its meetings. The AC also has the power to conduct or authorise investigations into any matters within its terms of reference.



12.4 The AC has specific written terms of reference and performed the following functions:

(i) reviews and evaluates with the external auditors on their audit plan, financial results of the Group and any material non-compliance and internal control weaknesses reported by the external auditors;

(ii) monitors the scope and results of the external audit, its cost effectiveness, independence, objectivity and gives its recommendations to the Board and the Company regarding the appointment, re-appointment or removal of the external auditors;

(iii) reviews the draft quarterly and full year financial statements of the Group and the Company before submission to the Board, including announcements relating thereto, to Shareholders and the SGX-ST;

(iv) reviews the adequacy of (a) Internal Audit (“IA”) function’s activities to ensure that IA has adequate resources and appropriate standing within the Company and (b) the internal audit programme and (c) ensures co-ordination between the internal auditors, external auditors and Management; and

(v) ensures that IA meets the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.

The AC had recommended and the Board had approved to table the re-appointment of KPMG LLP as auditors of the Company for shareholders’ approval at the forthcoming AGM.

The AC shall continue to monitor the scope and results of the external audit, its cost effectiveness, as well as the independence and objectivity of the external auditors and give its recommendations to the Board and the Company regarding the appointment, re-appointment or removal of the external auditors.

KPMG LLP, the Company’s external auditors, carried out, as part of their statutory audit, a review of the effectiveness of the Company’s internal accounting controls on an annual basis. Any material internal accounting control weaknesses noted in the course of the statutory audit were reported by the external auditors to the AC.

12.5 Annually, the AC meets with the external auditors without the presence of management. Where warranted, the AC shall meet with the internal auditors without the presence of management to review any matters that must be raised.

12.6 The amount of audit and non-audit fees paid to the external auditors in FY2016 is disclosed on Page 107 of the Annual Report.

The AC has reviewed the non-audit services (mainly tax compliance) provided by the external auditors to the Group in FY2016 and is satisfied that such services would not impair the independence of the external auditors in their conduct of the statutory audit.



12.7 The Group has a Whistle-Blowing Policy where employees of the Group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matters and for appropriate follow-up action. The arrangement provides for investigation to be undertaken by the Internal Auditor as the Whistleblower Investigation Officer who reports directly to the CEO or the Chairman of the AC if the concern involves the CEO.

12.8 Summary of AC’s activities in FY2016

During the year, the AC:

(i) reviewed the financial statements of the Company before the announcement of the Company’s quarterly and full-year results;

(ii) reviewed the key areas of Management judgement applied for adequate provisioning and disclosure, critical accounting policies and any significant changes made that would have a material impact on the financials;

(iii) reviewed and approved both the Group internal auditor’s and external auditor’s plans to ensure that the plans covered sufficiently in terms of audit scope in reviewing the significant internal controls comprise financial, operational and compliance controls of the Company;

(iv) reviewed the independence and objectivity of the internal and external auditors through discussions with the internal and external auditors;

(v) reviewed audit and non-audit fees;

(vi) reviewed the appointment of a different auditor for its subsidiaries;

(vii) reviewed the accounting, auditing and financial reporting matters so as to ensure that an effective system of control is maintained in the Group;

(viii) reviewed the internal audit functions and discusses accounting implications of major transactions including significant financial reporting issues; and

(ix) reviewed interested party transactions.

Financial reporting and significant financial judgement

The role of the AC in relation to financial reporting is to monitor the integrity of the quarterly and full year financial statements and that of any formal announcements relating to the Group’s financial performance. For the financial year under review, the AC has considered whether accounting standards are consistently applied across the Group and whether disclosures to the financial statements are clear and sufficient.



Following discussions with the management and the external auditors, the AC has determined that the following areas are the key audit matters of the Group’s financial statements. The table below summarised how these key audit matters were deliberated and addressed:

Matters Considered Action

Valuation and impairment of non-financial assets – S$115.8m (45% of Group’s total assets)

The AC considered the approach and methodology applied to the valuation and impairment assessment of the non-financial assets of the Group.

The AC discussed with external auditors on their review of the reasonableness and relevance of the assumptions used in the assessment.

The AC was satisfied that the key assumptions used in the assessments were balanced in comparison with the Group’s historical performance against market data.

The AC concurred with the management’s conclusion that no impairment losses are required.

Valuation of available-for-sale financial assets – S$17.1m (7% of Group’s total assets)

The AC considered the methodology applied to the valuation assessment of the available-for-sale financial assets comprised mainly investments in Venture Capital Funds (“VCFs”)

The AC has also obtained understanding on the work performed by the external auditors.

The AC was satisfied that the fair values of VCFs recorded are consistent with the latest available valuation reports issued by the professional fund managers.

Valuation of trade receivables – S$35.3m (14% of Group’s total assets)

The AC assessed the recoverability of the trade receivables by considering the improvement in the trade receivables’ aging, the historical default rate and the post year end collection.

The AC also considered the findings presented by the external auditors with reference to review of key controls over trade receivables.

The above procedures provided the AC with the assurance on the approach and conclusion drawn by the management on the impairment allowance of the trade receivables.



Internal Audit

Principle 13: The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audit.


13.1 The internal audit function reports directly to the Audit Committee. The AC reviews and approves the annual audit plan and resources to ensure that the internal auditors have the necessary resources to adequately perform their duties.

13.2 to 13.5 Our in-house internal audit team reports directly to the Chairman of the AC on internal audit matters. The AC has reviewed the adequacy of the in-house internal audit function and is satisfied that the team is adequately resourced and has appropriate standing within the Company.

SHAREHOLDER RIGHTS AND RESPONSIBILITIES

Shareholder Rights

Principle 14: Companies should treat all shareholders fairly and equitably, and should recognize, protect and facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements.


14.1 The Company is committed to regular and timely communication with shareholders as part of the organisation’s development to build systems and procedures that will enable the Group to compete internationally. The Company strives to maintain a high standard of transparency and to promote better investor communications. It aims to provide investors with clear, balanced and useful information, on a timely basis, about the Group’s performance, financial position and prospects.

14.2 Management supported the Code’s principle to encourage shareholder participation. Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of the Company’s strategy and goals. Notice of the AGM is despatched to shareholders, together with explanatory notes or a circular on items of special business (if necessary), at least 14 days or 21 days, as the case may be, before the meeting. The Board welcomes questions from shareholders who have an opportunity to raise issues either informally or formally before or at the AGM.

14.3 The Constitution of the Company allow each shareholder to appoint up to two proxies to attend AGMs.



On 3 January 2016, the legislation was amended, amongst other things, to allow certain members, defined as “relevant intermediary” to attend and participate in general meetings without being constrained by the two-proxy requirement. Relevant intermediary includes corporations holding licenses in providing nominee and custodial services and CPF Board which purchases shares on behalf of the CPF investors.

COMMUNICATION WITH SHAREHOLDERS

Principle 15: Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders.


15.1 The Company provides sufficient and regular information to its shareholders on a timely and fair basis regarding its business developments and financial performance that could have a material impact on the price or value of its shares. The Board embraces openness and transparency in the conduct of the Company’s affairs, whilst safeguarding its commercial interests.

15.2 The Company does not practise selective disclosure. In line with continuous obligations of the Company pursuant to the SGX-ST Listing Manual and the Companies Act (Cap 50) of Singapore, the Board’s policy is that all shareholders should be equally and timely informed of all major developments that will impact the Company or the Group. Information is communicated to shareholders on a timely basis through the Singapore Exchange Network (the “SGXNET”) and the press.

15.3 The Board welcomes the views of shareholders on matters affecting the Company, whether at shareholders’ meetings or on an ad hoc basis. At AGMs, shareholders are given the opportunity to air their views and to ask the Directors and Management questions regarding the Group.

15.4 The Company has adopted quarterly reporting of its financial results since FY2003. Accordingly, in FY2015, quarterly financial results of the Company were published via SGXNET.

15.5 The Company’s seeks to balance dividend return to shareholders with the need for long-term sustainable growth whilst aiming for an efficient capital structure.

The declaration of a first and final tax-exempt (1-tier) dividend of 2.5 cents per ordinary share has been proposed for FY2016.



CONDUCT OF SHAREHOLDER MEETINGS

Principle 16: Companies should encourage greater shareholder participation at general meetings of shareholders, and allow shareholders the opportunity to communicate their views on various matters affecting the company.


16.1 In general meetings, shareholders are given the opportunity to communicate their views and direct questions to Directors and Management regarding the Company. The Chairpersons of Board Committees are present at the AGM and other general meetings of shareholders, to assist the Board in addressing shareholders’ questions. The minutes of AGM are available to shareholders upon their request.

Shareholders have the opportunity to participate effectively and to vote in the AGM either in person or by proxy.

The Company is not implementing absentia voting methods such as voting via mail, e-mail or fax until security, integrity and other pertinent issues are satisfactorily resolved.

16.2 Resolutions to be passed at general meetings are always separate and distinct in terms of issue and are consistent with the Code’s recommendation that companies avoid ‘bundling’ resolutions unless the resolutions are interdependent and linked so as to form one significant proposal.

16.3 The Chairpersons of the AC, NC and RC are also present and available to address to questions raised. In addition, the external auditors are present at AGMs to address queries, if any, on the conduct of the audit and the preparation and content of the Auditors’ Report.

16.4 & 16.5 To have greater transparency in the voting process, with effect from FY2013, the Company conducts the voting of all its resolutions by poll at its AGM. The detailed voting results of each of the resolutions tabled are announced on the same day after the meetings. The total numbers of votes cast for or against the resolutions are also announced after the meetings via SGXNET.

Rule 1207(19) of the SGX-ST Listing Rules

DEALING IN SECURITIES

An internal code, which complies with Rule 1207(19) of the Listing Manual of the SGX-ST, with respect to dealings in securities of the Company, has been issued to Directors and officers. The Company’s Directors and officers are not allowed to deal in the Company’s shares within two weeks before the announcement of its results for the first three quarters of the year. The Directors and officers are not allowed to deal in the Company’s shares one month before the announcement of its full year results.

Directors and officers are not expected to deal in the Company’s securities on considerations of a short-term nature. Directors and officers are required to observe insider trading provisions under the Securities and Futures Act at all times even when dealing in the Company’s securities within the permitted periods. Directors of the Company are required to report all dealings to the Company Secretary.



Rule 1207(8) of the SGX-ST Listing Rules

MATERIAL CONTRACTS

Save as the service agreement entered with the CEO and the other executive director, no other material contracts involving the interests of the CEO, directors or controlling shareholders of the Company has been entered into by the Company and its subsidiaries, which were either subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial year.

Rule 1207(17) of the SGX-ST Listing Manual

INTERESTED PERSON TRANSACTION (“IPT”)

The Company has established procedures to ensure that all transactions with interested persons are reported on in a timely manner to the AC and that the transactions are carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders.

During the year under review, there have been no material interested person transactions requiring disclosure pursuant to the SGX-ST Listing Manual.

No IPT Mandate has been obtained from shareholders.

TABLE 1 – ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS FOR FY2016

Directors

Board of Directors

NominatingCommittee

AuditCommittee

Remuneration Committee

Number of Meetings

Held Attended Held Attended Held Attended Held Attended

Tan Cheng Gay 5 5 – – – – – –

Tan Yok Koon 5 5 1 1 – – – –

Ronnie Teo Heng Hock 5 5 1 1 4 4 1 1

Ng Tat Pun 5 5 – – 4 4 1 1

Soh Kim Soon 5 5 1 1 4 4 1 1

TABLE 2 – BOARD AND BOARD COMMITTEES FOR FY2016

BoardNominating Committee

Audit Committee

Remuneration Committee

Non-independent Directors

Tan Cheng Gay (executive) Chairman – – –

Tan Yok Koon (executive) Member Member – –

Independent Non-executive Directors

Ng Tat Pun Member – Chairman Member

Soh Kim Soon (also Lead Independent Director) Member Chairman Member Member

Ronnie Teo Heng Hock Member Member Member Chairman



TABLE 3 – DATE OF DIRECTOR’S INITIAL APPOINTMENT & LAST RE-ELECTION & THEIR DIRECTORSHIPS

Name of Director Age

Date of initial appointment

Date of lastre-election/

re-appointment

Present directorships in listed companies

Past (preceding 3 years) directorships in listed companies

Tan Cheng Gay 70 27/11/1973 28/04/2015 EnGro Corporation Limited –

Tan Yok Koon 68 17/05/1974 29/04/2014 EnGro Corporation Limited –

Ng Tat Pun 72 01/07/2002 29/04/2016 1) EnGro Corporation Limited

2) Thai Beverage Public Company Ltd

3) Sing Investments & Finance Limited

–

Soh Kim Soon 71 19/11/2002 29/04/2016 1) EnGro Corporation Limited

2) Frasers Centrepoint Asset Management Ltd

–

Ronnie Teo Heng Hock

68 05/01/2012 29/04/2016 1) EnGro Corporation Limited

2) Uni-Asia Holdings Limited

New Toyo International Holdings Ltd

TABLE 4 – REMUNERATION OF DIRECTORS

The breakdown of the total remuneration of the Directors of the Company for the year ended 31 December 2016 is set out below:

Name of Directors Position

Breakdown of Remuneration in Percentage (%) Actual Total Remuneration in Compensation Bands of S$250,000

Directors’Fee

Salary %

Bonus %

Other Benefits

%Total

%

Tan Cheng Gay ED – 89 7 4 100 500,000 – 749,999

Tan Yok Koon ED 1 53 17 29 100 500,000 – 749,999

Ronnie Teo Heng Hock NEID 100 – – – 100 <250,000

Ng Tat Pun NEID 100 – – – 100 <250,000

Soh Kim Soon NEID 100 – – – 100 <250,000

The Aggregate Total Remuneration (S$’000) of Directors 1,379

Notes

ED: Executive DirectorNEID: Non-Executive Independent Director



TABLE 4A – REMUNERATION OF TOP 5 KEY MANAGEMENT PERSONNEL (WHO ARE NOT ALSO DIRECTORS OR THE CEO)

The breakdown of total remuneration of the top 5 key management personnel (who are not also Directors or the CEO) of the Group for the year ended 31 December 2016 is set out below:

Name of Top 5 Management Personnel Position

Breakdown of Remuneration in Percentage (%) Actual Total

Remuneration in Compensation Bands of S$250,000

Salary %

Bonus %

Other Benefits

%Total

%

Ho Pol Lim Eugene

Senior General Manager Building Materials

71 24 5 100 250,000 – 499,999

Len Cheng Chief Financial Officer 80 15 5 100 250,000 – 499,999

Chen En YiGeneral Manager Specialty Cement

74 23 3 100 <250,000

Wong Toon HongManager, Strategic Business Unit

82 16 2 100 <250,000

Vincent LohManager, Knowledge Management & Business Development

63 32 5 100 <250,000

The Aggregate Total Remuneration (S$’000) of Top 5 Key Management Personnel 1,250

Legend:

Salary: Basic salary and Employer’s Central Provident Fund (“CPF”) contributionBonus: Bonus is based on the Company and individual performance and includes Employer’s CPF contribution.Other Benefits: Transport allowance and other benefits.



44 DIRECTORS’ STATEMENT

48 INDEPENDENT AUDITORS’ REPORT

54 STATEMENTS OF FINANCIAL POSITION

55 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

56 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

58 CONSOLIDATED STATEMENT OF CASH FLOWS

60 NOTES TO THE FINANCIAL STATEMENTS




PROXY FORM

FINANCIAL CONTENTS

YEAR ENDED 31 DECEMBER 2016

We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2016.

In our opinion:

(a) the financial statements set out on pages 54 to 128 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016 and the financial performance, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

Directors

The directors in office at the date of this statement are as follows:

Tan Cheng Gay Executive ChairmanTan Yok Koon Executive DirectorNg Tat Pun Independent and Non-executive DirectorSoh Kim Soon Lead Independent and Non-executive DirectorRonnie Teo Heng Hock Independent and Non-executive Director

Directors’ interests

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (“the Act”), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares and share options in the Company are as follows:

Name of director and corporation in which interests are held

Holdings at beginning of the year

Holdings at end

of the year

The CompanyOrdinary shares– direct interests held

Tan Cheng Gay 636,750 636,750Tan Yok Koon 366,000 366,000Soh Kim Soon 46,500 46,500

– deemed interests heldTan Cheng Gay 16,500,500 16,500,500Tan Yok Koon 15,674,500 15,674,500

Except as disclosed in this statement, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year or at the end of the financial year.


DIRECTORS’ STATEMENT


Directors’ interests (Continued)

There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January 2017.

Except as disclosed under the “Share options” section of this statement, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Share options

(I) Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option Scheme (the “ESOS 2000”)

The Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option Scheme (the “ESOS 2000”) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 15 January 2001. The ESOS 2000 is administered by the Company’s Remuneration Committee, comprising three directors, Ronnie Teo Heng Hock (Chairman), Soh Kim Soon and Ng Tat Pun.

Other information regarding the ESOS 2000 is set out below:

(a) Options were granted on 1 December 2006 (Option 1), 8 January 2008 (Option 2) and 30 March 2009 (Option 3).

(b) The exercise prices of the options are set at S$0.75 per share (Option 1), S$1.17 per share (Option 2) and S$0.55 per share (Option 3).

(c) The options can be exercised after 1 December 2007 (Option 1), 8 January 2009 (Option 2) and 30 March 2010 (Option 3).

(d) The options granted shall expire on 1 December 2016 (Option 1), 8 January 2018 (Option 2) and 30 March 2019 (Option 3).

Option 1 expired on 1 December 2016 while Option 3 had been fully exercised in prior year.

(II) EnGro Corporation Limited 2011 Employees’ Share Option Scheme (the “ESOS 2011”)

The EnGro Corporation Limited 2011 Employees’ Share Option Scheme (the “ESOS 2011”) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 27 April 2011. The ESOS 2011 is administered by the Company’s Remuneration Committee, comprising three directors, Ronnie Teo Heng Hock (Chairman), Soh Kim Soon and Ng Tat Pun.


(a) Option was granted on 18 April 2012.

(b) The exercise price of the option is set at S$0.79 per share.




Share options (Continued)

(II) EnGro Corporation Limited 2011 Employees’ Share Option Scheme (the “ESOS 2011”)

(c) The option can be exercised after 18 April 2013.

(d) The option granted shall expire on 18 April 2022.

At the end of the financial year, details of the options granted under the ESOS 2000 and ESOS 2011 on the unissued ordinary shares of the Company, are as follows:

Date of grant of options

Exercise price per

share

Options outstanding at 1 January

2016Options

exercisedOptions forfeited

Options outstanding

at 31 December

2016

Number of option holders at

31 December 2016 Exercise period

ESOS 2000*01/12/2006 S$0.75 287,500 (145,000) (142,500) – – 02/12/2007 – 30/11/201608/01/2008 S$1.17 740,000 – – 740,000 8 09/01/2009 – 07/01/2018

1,027,500 (145,000) (142,500) 740,000

ESOS 201118/04/2012 S$0.79 205,000 – – 205,000 5 19/04/2013 – 17/04/2022

1,232,500 (145,000) (142,500) 945,000

* No further options will be granted under ESOS 2000.

Since the commencement of both Schemes, no options have been granted to the controlling shareholders of the Company or their associates and no participant under both Schemes has been granted 5% or more of the total options available under both Schemes.

The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights to participate in any share issue of any other company.

Except as disclosed above, there were no unissued shares of the Company or its subsidiary corporations under options granted by the Company or its subsidiary corporations as at the end of the financial year.

Audit Committee

The members of the Audit Committee during the year and at the date of this statement are:

Ng Tat Pun (Chairman)Soh Kim SoonRonnie Teo Heng Hock

The Audit Committee performs the functions specified in Section 201B of the Act, the SGX Listing Manual and the Code of Corporate Governance.




Audit Committee (Continued)

The Audit Committee has held four meetings since the last directors’ statement. In performing its functions, the Audit Committee met with the Company’s external and internal auditors to discuss the scope of their work, the results of their examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

(i) effectiveness of the management of financial business risks and the reliability of management reporting;

(ii) assistance provided by the Company’s officers to the internal and external auditors;

(iii) quarterly financial information and annual financial statements of the Group and the Company prior to their submission to the directors of the Company for adoption; and

(iv) interested person transactions (as defined in Chapter 9 of the SGX Listing Manual).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

In appointing our auditors for the Company, subsidiaries and significant associated companies, we have complied with Rules 712 and 715 of the SGX Listing Manual.

Auditors

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Tan Cheng GayDirector

Tan Yok KoonDirector

30 March 2017



REPORT ON THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of EnGro Corporation Limited (“the Company”) and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at 31 December 2016, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 54 to 128.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act, Chapter 50 (“the Act”) and Financial Reporting Standards in Singapore (“FRSs”) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 December 2016 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further described in the ‘Auditors’ responsibilities for the audit of the financial statements’ section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.


MEMBERS OF THE COMPANY ENGRO CORPORATION LIMITED

INDEPENDENTAUDITORS’ REPORT

Valuation and impairment of non-financial assets (Refer to Note 4 to the financial statements)

The key audit matter How the matter was addressed in our audit

As at 31 December 2016, the Group’s net asset value exceeded its market capitalisation by approximately $120 million. This is an indication that the Group’s non-financial assets may be impaired. The carrying value of the Group’s non-financial assets, which comprise mainly investments in associates and joint ventures, and property, plant and equipment (PPE), account for approximately 45% of the Group’s total assets.

In accordance with FRS36 Impairment of Assets, the Group performed an assessment of the recoverable amounts of the Group’s non-financial assets as at the reporting date for the Group’s significant cash generating units (CGUs), comprising five CGUs with a total PPE carrying amount of S$14.3 million and carrying amount of investment in associates and joint ventures of S$101.1 million.

The recoverable amounts of these CGUs have been derived using their values in use. Various assumptions which involve estimates and judgements made by the Group are used in the value in use calculations. These estimates and judgements include revenue growth, selling price growth and the discount rates.

We considered management’s assessment of those cash generating units (“CGUs”) with indicators of impairment. For those CGUs with indicators of impairment identified, we evaluated management’s value in use calculations prepared based on cash flow forecasts. We determined the appropriateness of key assumptions used, including sales volume growth rate, selling price growth rate and discount rate by comparing to historical sales data and market data drawn from independent data sources.

Our findings

We found that the Group’s CGUs with impairment indicators have been appropriately identified. The key assumptions used in the value in use calculations were balanced in comparison with the Group’s historical performance against market data. We found the disclosures of the inherent estimation uncertainty to be proportionate with respect to the assumptions in the value in use calculations.


INDEPENDENTAUDITORS’ REPORTMEMBERS OF THE COMPANY ENGRO CORPORATION LIMITED

Valuation of available-for-sale financial assets (Refer to Note 25 to the financial statements)


The Group has significant investments in available-for-sale financial assets. These investments comprise mainly investments in Venture Capital Funds (“VCFs”).

For investments in VCFs, the fair values are based on the valuation of the underlying assets, which consist of quoted and unquoted debt and equity securities. For certain unquoted debt and equity securities, there are unobservable inputs used in the determination of fair value.

The valuation of these investments requires the use of expertise and judgement.

Our audit procedures performed on the valuation of the available-for-sale financial assets included, among others, checking to the latest available valuation reports of the VCFs to ascertain the accuracy of their fair values. The VCF valuations were performed by the VCF fund managers, utilising valuation models which are generally accepted by market participants, such as last round financing price and similar recent transactions in the private market led by a reputable valuer. In placing reliance on the VCF valuations, we evaluated the competency and objectivity of the VCF fund managers by reviewing their professional credentials and corroborating the valuation inputs used to observable market data.

Our findings

We found the fair values of VCFs recorded to be consistent with the latest available valuation reports and after taking into consideration all capital calls and distributions that have occurred subsequent to the date of the valuation reports. We also identified no concerns over the competence, capability and objectivity of the VCF fund managers in performing the valuations, as a basis for reliance. We found the disclosure of the significant unobservable inputs and their interrelation with fair value measurement to be adequate.




Valuation of trade receivables (Refer to Note 25 to the financial statements)


The Group is exposed to credit risk, which is concentrated in construction companies based in Singapore and Malaysia. Risk exists over the recovery of trade receivables from customers in the construction industry. The estimate of the allowance for impairment of trade receivables requires the use of judgement of the customers’ ability to pay.

We tested the design and implementation of the key controls over identification of trade receivables with impairment indicators. We evaluated the Group’s specific and collective impairment assessment as at year end. Our audit procedures performed include performing a retrospective review to assess the reliability of management’s estimation by comparing the amount of provisions made in previous year against the actual subsequent utilisation of these provisions, discussing with management the recoverability of trade receivables that were past due, selecting samples of trade receivables and checking to collections subsequent to year end and comparing the ageing profile of the trade receivables to the payment patterns of the customers.

Our findings

Our testing of control did not identify weaknesses in the design and operation of control that would have required us to expand the extent of our planned audit procedures. We found the Group’s estimate of the allowance for impairment of trade receivables as described in note 25 to be balanced and the disclosures of the inherent estimation uncertainty to be adequate.

Other information

Management is responsible for the other information. The other information comprises the Corporate Profile, Chairman’s Message, Directors’ Profiles, Management Team, Corporate Structure, Regional Footprint, Business Review, Corporate Social Responsibility, Financial Highlights, Corporate Governance Report, Supplementary Information and Statistics of Shareholdings (“the Reports”), which we obtained prior to the date of this auditors’ report.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.



Responsibilities of management and directors for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

• Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists management’s going concern assumption related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.




• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless the law or regulations preclude public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

The engagement partner on the audit resulting in this independent auditors’ report is Low Gin Cheng, Gerald.

KPMG LLPPublic Accountants andChartered Accountants

Singapore30 March 2017



Group CompanyNote 2016 2015 2016 2015

$’000 $’000 $’000 $’000

AssetsProperty, plant and equipment 4 14,250 15,199 2,760 2,948Subsidiaries 5 – – 54,475 47,333Intangible assets 6 425 328 131 –Associates and joint ventures 7 101,096 101,007 60,555 60,243Other investments 8 17,742 21,914 1,217 1,217Other assets 9 97 172 97 172Amounts due from associates and

joint venture 11 1,037 1,607 – –Loan to a subsidiary 12 – – 5,059 –Deferred tax assets 17 29 29 – –

Non-current assets 134,676 140,256 124,294 111,913

Other investments 8 21,717 23,611 – –Inventories 10 10,132 13,725 5,114 8,170Trade and other receivables 11 47,964 51,580 49,012 67,135Loans to a subsidiary 12 – – – 7,498Cash and cash equivalents 13 39,393 33,621 20,363 10,992

Current assets 119,206 122,537 74,489 93,795

Total assets 253,882 262,793 198,783 205,708

EquityShare capital 14 85,270 85,270 85,270 85,270Reserves 14 133,938 138,181 90,112 95,129

Equity attributable to owners of the Company 219,208 223,451 175,382 180,399

Non-controlling interests 123 62 – –

Total equity 219,331 223,513 175,382 180,399

LiabilitiesLoans and borrowings 16 6,919 7,291 244 433Deferred tax liabilities 17 756 655 – –

Non-current liabilities 7,675 7,946 244 433

Loans and borrowings 16 3,633 4,440 13,775 11,867Trade and other payables 18 22,881 26,685 9,382 13,009Current tax liabilities 362 209 – –

Current liabilities 26,876 31,334 23,157 24,876

Total liabilities 34,551 39,280 23,401 25,309

Total equity and liabilities 253,882 262,793 198,783 205,708

The accompanying notes form an integral part of these financial statements.


AS AT 31 DECEMBER 2016

STATEMENTS OFFINANCIAL POSITION

Note 2016 2015$’000 $’000

Revenue 19 153,297 180,770Changes in inventories of finished goods and work in progress (2,507) 1,779Other income 2,883 5,302Raw materials (114,659) (142,603)Depreciation of property, plant and equipment 4 (4,358) (4,768)Amortisation of intangible assets 6 (77) (5)Staff costs (14,296) (17,439)Other expenses (22,318) (27,942)

Results from operating activities (2,035) (4,906)

Finance income 20 5,679 3,876Finance costs 20 (1,676) (3,411)

Net finance income 4,003 465

Share of profit/(loss) of associates and joint ventures, net of tax 4,884 (698)

Profit/(Loss) before tax 6,852 (5,139)Tax expense 21 (971) (306)

Profit/(Loss) for the year 22 5,881 (5,445)

Profit/(Loss) attributable to:Owners of the Company 5,768 (5,283)Non-controlling interests 113 (162)

Profit/(Loss) for the year 5,881 (5,445)

Other comprehensive incomeItems that are or may be reclassified subsequently to profit or

loss:Foreign currency translation differences (2,937) 180Exchange differences on monetary items forming part of net investment

in foreign operations 941 2,459Net change in fair value of available-for-sale financial assets reclassified

to profit or loss (3,486) 2,377Net change in fair value of available-for-sale financial assets (1,528) (575)

Other comprehensive income for the year, net of tax (7,010) 4,441

Total comprehensive income for the year (1,129) (1,004)

Total comprehensive income attributable to:Owners of the Company (1,190) (933)Non-controlling interests 61 (71)

Total comprehensive income for the year (1,129) (1,004)

Earnings per shareBasic earnings per share (cents) 23 4.86 (4.45)

Diluted earnings per share (cents) 23 4.86 (4.45)




CONSOLIDATED STATEMENT OF PROFIT OR LOSSAND OTHER COMPREHENSIVE INCOME

Attributable to owners of the Company

Share

capital

Capital

reserve

Reserve

for own

shares

Share

option

reserve

Foreign

currency

translation

reserve

Fair value

reserve

Accumulated

profits* Total

Non-

controlling

interests

Total

equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2015 85,270 (21) (20) 168 632 8,125 133,844 227,998 133 228,131

Total comprehensive income

for the year

Loss for the year – – – – – – (5,283) (5,283) (162) (5,445)

Other comprehensive

income

Foreign currency translation

differences – – – – 89 – – 89 91 180

Exchange differences on

monetary items forming part

of net investment in foreign

operations – – – – 2,459 – – 2,459 – 2,459

Net change in fair value of

available-for-sale financial

assets reclassified to

profit or loss – – – – – 2,377 – 2,377 – 2,377



assets – – – – – (575) – (575) – (575)

Total other comprehensive

income – – – – 2,548 1,802 – 4,350 91 4,441


for the year – – – – 2,548 1,802 (5,283) (933) (71) (1,004)

Transactions with owners,

recognised directly in

equity

Distributions to owners

Final one-tier dividend declared

of 3 cents per share in

respect of year ended

31 December 2014 – – – – – – (3,561) (3,561) – (3,561)

Own shares acquired – – (53) – – – – (53) – (53)

Total distributions to owners – – (53) – – – (3,561) (3,614) – (3,614)

At 31 December 2015 85,270 (21) (73) 168 3,180 9,927 125,000 223,451 62 223,513

* Included in accumulated profits is the Group’s share of statutory common reserves of its associates and joint ventures of $15,031,000 that are not distributable as cash dividends.




CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

Attributable to owners of the Company

Share

capital

Capital

reserve

Reserve

for own

shares

Share

option

reserve

Foreign

currency

translation

reserve

Fair value

reserve

Accumulated

profits* Total

Non-

controlling

interests

Total

Equity

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2016 85,270 (21) (73) 168 3,180 9,927 125,000 223,451 62 223,513


for the year

Profit for the year – – – – – – 5,768 5,768 113 5,881

Other comprehensive

income

Foreign currency translation

differences – – – – (2,885) – – (2,885) (52) (2,937)

Exchange differences on

monetary items forming part

of net investment in foreign

operations – – – – 941 – – 941 – 941



assets reclassified to

profit or loss – – – – – (3,486) – (3,486) – (3,486)



assets – – – – – (1,528) – (1,528) – (1,528)

Total other comprehensive

income (1,944) (5,014) – (6,958) (52) (7,010)


for the year – – – – (1,944) (5,014) 5,768 (1,190) 61 (1,129)

Transactions with owners,

recognised directly in

equity

Contributions by and

distributions to owners

Final one-tier dividend declared

of 2.5 cents per share in

respect of year ended 31

December 2015 – – – – – – (2,968) (2,968) – (2,968)

Issue of treasury shares under

share option scheme – (24) 144 (14) – – – 106 – 106

Own shares acquired – – (191) – – – – (191) – (191)

Total contributions by and

distributions to owners – (24) (47) (14) – – (2,968) (3,053) – (3,053)

At 31 December 2016 85,270 (45) (120) 154 1,236 4,913 127,800 219,208 123 219,331

* Included in accumulated profits is the Group’s share of statutory common reserves of its associates and joint ventures of $15,694,000 that are not distributable as cash dividends.




CONSOLIDATED STATEMENT OFCHANGES IN EQUITY

Note 2016 2015$’000 $’000

Cash flows from operating activitiesProfit/(Loss) before tax 6,852 (5,139)Adjustments for:Depreciation of property, plant and equipment 4 4,358 4,768Allowance for inventory obsolescence 64 –Amortisation of intangible assets 6 77 5Dividend income 20 (436) (844)Gain on disposal of property, plant and equipment 22 (230) (362)Allowance for doubtful receivables 22 688 501Impairment losses on other assets 9 75 –Impairment loss on available-for-sale financial assets 20 1,261 2,957Interest income 20 (766) (162)Interest expense 415 454Other investment income 20 (220) (1,110)Gain on disposal of available-for-sale financial assets 20 (3,466) (56)Impairment loss on property, plant and equipment 22 – 1,540Net change in fair value of financial assets at fair value through profit or

loss (745) (655)Share of (profit)/loss of associates and joint ventures, net of tax (4,884) 698

3,043 2,595Changes in working capital:Inventories 3,526 (2,580)Trade and other receivables (2,258) (7,098)Trade and other payables 1,097 664

Cash generated from/(used in) operations 5,408 (6,419)Tax paid (465) (894)

Net cash from/(used in) operating activities 4,943 (7,313)

Cash flows from investing activitiesAcquisition of property, plant and equipment (2,765) (1,140)Distributions from available-for-sale financial assets 835 1,038Dividends received from:– associates and joint ventures 1,960 4,358– other investments 384 844Interest received 183 162Proceeds from disposal of:– available-for-sale financial assets 2,634 1,341– financial assets at fair value through profit or loss 3,285 14,833– property, plant and equipment 668 686Purchase of available-for-sale financial assets (1,374) (1,990)Purchase of financial assets at fair value through profit or loss (613) (3,720)Investment in a joint venture (312) –Advance of non-trade amount to a joint venture – (6,503)Repayment of non-trade amount from a joint venture 6,071 –

Net cash from investing activities 10,956 9,909




CONSOLIDATED STATEMENT OFCASH FLOWS

Note 2016 2015$’000 $’000

Cash flows from financing activitiesRefund of deposits pledged 500 –Dividends paid (7,326) (2,966)Interest paid (415) (679)Payment of finance lease liabilities (3,106) (3,555)Proceeds from exercise of share options 106 –Proceeds from trust receipts 1,273 –Repayment of loan from a non-controlling interest of a subsidiary (947) –Repurchase of own shares (191) (53)Loan from a non-controlling interest of a subsidiary 569 1,361

Net cash used in financing activities (9,537) (5,892)

Net increase/(decrease) in cash and cash equivalents 6,362 (3,296)Cash and cash equivalents at 1 January 33,121 36,440Effect of exchange rate fluctuations on cash held (90) (23)

Cash and cash equivalents at 31 December 13 39,393 33,121

Significant non-cash transaction

The following significant non-cash transaction is not included in the statement of cash flows:

2016 2015

$’000 $’000

Acquisition of property, plant and equipment under finance leases 1,457 2,404




CONSOLIDATED STATEMENT OFCASH FLOWS

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 30 March 2017.

1 DOMICILE AND ACTIVITIES

EnGro Corporation Limited (the “Company”) is incorporated in the Republic of Singapore. The address of the Company’s registered office is 29 International Business Park, #08-05/06, Acer Building Tower B, Singapore 609923.

The financial statements of the Group as at and for the year ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interests in equity-accounted investees.

The principal activities of the Group are those relating to the manufacture and sale of cement and building materials and specialty polymers and of an investment holding company.

2 BASIS OF PREPARATION

2.1 Statement of compliance

The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (“FRS”).

2.2 Basis of measurement

The financial statements have been prepared on the historical cost basis except as otherwise described in the notes below.

2.3 Functional and presentation currency

These financial statements are presented in Singapore dollars, which is the Company’s functional currency. All financial information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

2.4 Use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Management is of the opinion that there are no critical judgements made in applying the accounting policies.


NOTES TO THEFINANCIAL STATEMENTSYEAR ENDED 31 DECEMBER 2016

2 BASIS OF PREPARATION (CONTINUED)

2.4 Use of estimates and judgements (Continued)

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

• Note 4 – Impairment of property, plant and equipment• Note 25 – Impairment of trade and other receivables• Note 25 – Valuation of available-for-sale financial assets

Information about other estimates applied are included in the following notes:

• Note 4 – Useful economic lives of property, plant and equipment• Note 5 – Impairment of investments in subsidiaries• Note 10 – Allowance for inventory obsolescence

Measurement of fair values

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement (with Level 3 being the lowest).

The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in Note 25 – Financial instruments.

2.5 Changes in accounting policies

In the current financial year, the Group has adopted all the new and revised FRSs and Interpretations of FRSs (“INT FRSs”) that are relevant to its operations and effective for annual periods beginning on 1 January 2016. The adoption of these new and revised FRSs and INT FRSs does not result in substantial changes to the Group’s accounting policies and has no material effect on the amounts reported for the current and prior periods.



3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities.

3.1 Basis of consolidation

Business combinations

Business combinations are accounted for using the acquisition method in accordance with FRS 103 Business Combination as at the date of acquisition, which is the date on which control is transferred to the Group.

The Group measures goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus

• the recognised amount of any non-controlling interests in the acquiree; plus

• if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree,

over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is tested annually for impairment.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration payable is recognised at fair value at the acquisition date and included in the consideration transferred. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation, are measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets, at the date of acquisition. The measurement basis taken is elected on a transaction-by-transaction basis. All other non-controlling interests are measured at acquisition-date fair value, unless another measurement basis is required by FRSs.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.



3 SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

3.1 Basis of consolidation (Continued)

Business combinations (Continued)

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners in their capacity as owners and therefore no adjustments are made to goodwill and no gain or loss is recognised in profit or loss. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in subsidiaries are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

Investments in associates and joint ventures (“equity-accounted investees”)

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies of these entities. Significant influence is presumed to exist when the Group holds 20% or more of the voting power of another entity. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Investments in associates and joint ventures are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.




3.1 Basis of consolidation (Continued)

Investments in associates and joint ventures (“equity-accounted investees”) (Continued)

When the Group’s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation to fund the investee’s operations or has made payments on behalf of the investee.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Subsidiaries, associates and joint ventures in the separate financial statements

Investments in subsidiaries, associates and joint ventures are stated in the Company’s statement of financial position at cost less accumulated impairment losses.

3.2 Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the translation of available-for-sale equity instruments which are recognised in other comprehensive income except on impairment in which case foreign currency differences that have been recognised in other comprehensive income are reclassified to profit or loss.




3.2 Foreign currency (Continued)

Foreign operations

The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to Singapore dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Singapore dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and are translated at the exchange rates at the reporting date. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used.

Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of a net investment in a foreign operation are recognised in other comprehensive income, and are presented in the foreign currency translation reserve in equity.

3.3 Financial instruments

Non-derivative financial assets

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.




3.3 Financial instruments (Continued)

Non-derivative financial assets (Continued)

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables and available-for-sale financial assets.

Financial assets at fair value through profit or loss

A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group’s investment strategy. Attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through profit or loss are measured at fair value, and changes therein, which takes into account any dividend income, are recognised in profit or loss.

Financial assets classified as held for trading comprise equity and debt securities actively managed by the Group.

Financial assets designated at fair value through profit or loss comprise equity and debt securities that otherwise would have been classified as available-for-sale.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Loans and receivables comprise loans to a subsidiary, cash and cash equivalents, and trade and other receivables (excluding prepayments).

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value. For the purpose of the statement of cash flows, pledged deposits are excluded.






Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.

Available-for-sale financial assets comprise investments in equity securities and venture capital funds.

When the fair value for unquoted securities cannot be reliably measured because the variability in the range of reasonable fair value estimates is significant or that investment or probabilities of the various estimates within the range cannot be reasonably assessed and used in estimating fair value, such securities are stated at cost less any impairment losses.

Distributions of cash or quoted equity shares made by venture funds are recognised in the financial statements as and when they are received. Such distributions are initially treated as return of investment and are therefore offset against the cost of the investment. Any cash distributions received in excess of the cost of the investment are taken to profit or loss. Distributed quoted equity shares are stated at market value and any increases or decreases in carrying amount are included in other comprehensive income.

Non-derivative financial liabilities

Financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group currently has a legally enforceable right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

The Group classifies non-derivative financial liabilities into the other financial liabilities category.

Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. These financial liabilities comprise loans and borrowings, and trade and other payables.





Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Repurchase, disposal and reissue of share capital (treasury shares)

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own shares account. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in non-distributable capital reserve.

Intra-group financial guarantees in the separate financial statements

Financial guarantees are financial instruments issued by the Company that require the issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when due in accordance with the original or modified terms of a debt instrument.

Financial guarantee contracts issued by Group entities to external parties are accounted for as insurance contracts. A provision is recognised based on the Company’s estimate of the ultimate cost of setting all claims incurred but unpaid at the reporting date. The provision is assessed by reviewing individual claims and tested for adequacy by Company against the amount that would be required to settle the guarantee contracts.

3.4 Property, plant and equipment

Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes:

• the cost of materials and direct labour;

• any other costs directly attributable to bringing the assets to a working condition for their intended use;




3.4 Property, plant and equipment (Continued)

Recognition and measurement (Continued)

• when the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and

• capitalised borrowing costs.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss.

Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment, unless it is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use, or in respect of assets under construction, from the date that the asset is ready for use.




3.4 Property, plant and equipment (Continued)

Depreciation (Continued)

The estimated useful economic lives for the current and comparative years are as follows:

Leasehold property – over remaining lease term of 31 yearsBuildings and civil works – 3 to 20 yearsPlant, machinery and equipment – 4 to 10 yearsOffice equipment, furniture and fittings – 5 to 10 yearsComputers – 3 to 5 yearsMotor vehicles and transport equipment – 5 years

Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.

3.5 Intangible assets

Intangible assets that are acquired by the Group that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred.

Amortisation

Amortisation is calculated based on the cost of the asset, less its residual value.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful lives for the current and comparative years are as follows:

• Franchise rights 10 years• Software 8 years

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.




3.6 Leased assets

Leases in term of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

Other leases are operating leases and are not recognised in the Group’s statement of financial position.

3.7 Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in first-out principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated costs necessary to make the sale.

3.8 Impairment

Non-derivative financial assets

A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event(s) has occurred after the initial recognition of the asset, and that the loss event(s) has an impact on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. The Group considers a decline of 30% to be significant and a period of nine months to be prolonged.

Loans and receivables

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics.




3.8 Impairment (Continued)


Loans and receivables (Continued)

In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.


Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any impairment loss recognised previously in profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive income.

Associates and joint ventures

An impairment loss in respect of an associate or joint venture is measured by comparing the recoverable amount of the investment with its carrying amount, where the recoverable amount is the greater of its value in use and its fair value less costs to sell. An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.

Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit (“CGU”) exceeds its estimated recoverable amount.




3.8 Impairment (Continued)

Non-financial assets (Continued)

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amounts of assets in the CGU (group of CGUs) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

3.9 Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees.

Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

Share-based payment transactions

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.




3.10 Revenue

Sales of goods

Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised. The timing of the transfer of risks and rewards vary depending on the individual trade terms of the sales transactions.

3.11 Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

3.12 Finance income and finance costs

Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend income, gains on the disposal of available-for-sale financial assets, fair value gains on financial assets at fair value through profit or loss and reclassifications of net gains previously recognised in other comprehensive income. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance costs comprise interest expense on borrowings, losses on disposal of available-for-sale financial assets, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables) and reclassifications of net losses previously recognised in other comprehensive income.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.




3.13 Tax

Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and

• temporary differences related to investments in subsidiaries, associates and joint ventures to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future.

The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.




3.14 Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

3.15 Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the Group’s CEO (the chief operating decision maker) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Group’s CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise interest-earning fixed deposits and interest income, interest-bearing loans and interest expense, headquarter expense and tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets.

3.16 New standards and interpretations not adopted

A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2016 and earlier application is permitted; however, the Group has not early applied the following new or amended standards in preparing these statements.

For those new standards and amendments to standards that are expected to have an effect on the financial statements of the Group and the Company in future financial periods, the management is assessing the transition options and the potential impact on its financial statements, and to implement these standards. The Group does not plan to adopt these standards early.




3.16 New standards and interpretations not adopted (Continued)

Applicable to 2018 financial statements

New standards Summary of the requirements Potential impact on the financial statements

FRS 115 Revenue from Contracts with Customers

FRS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised as separate assets when specified criteria are met.

When effective, FRS 115 replaces existing revenue recognition guidance, including FRS 18 Revenue, FRS 11 Construction Contracts, INT FRS 113 Customer Loyalty Programmes, INT FRS 115 Agreements for the Construction of Real Estate, INT FRS 118 Transfers of Assets from Customers and INT FRS 31 Revenue – Barter Transactions Involving Advertising Services.

FRS 115 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. FRS 115 offers a range of transition options including full retrospective adoption where an entity can choose to apply the standard to its historical transactions and retrospectively adjust each comparative period presented in its 2018 financial statements. When applying the full retrospective method, an entity may also elect to use a series of practical expedients to ease transition.

Based on its initial assessment, the Group expects the adoption of FRS 115 to have no material impact to its financial statements.





Applicable to 2018 financial statements (Continued)


FRS 109 Financial Instruments

FRS 109 replaces most of the existing guidance in FRS 39 Financial Instruments: Recognition and Measurement. It includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from FRS 39.

FRS 109 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. Retrospective application is generally required, except for hedge accounting. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions. Restatement of comparative information is not mandatory. If comparative information is not restated, the cumulative effect is recorded in opening equity as at 1 January 2018.

Based on the initial assessment, there will be changes to the classification and measurement of financial assets under the Group’s Investment Segment. In addition, the expected credit loss model relevant to the impairment of financial assets will also affect the measurement of credit loss. The impact of the new standard on the Group’s financial statements will be determined when management completes the assessment.

Convergence with International Financial Reporting Standards (IFRS)

In addition, the Accounting Standards Council (“ASC”) announced on 29 May 2014 that Singapore-incorporated companies listed on the Singapore Exchange (“SGX”) will apply a new financial reporting framework identical to the International Financial Reporting Standards (referred to as SG-IFRS in these financial statements) for the financial year ending 31 December 2018 onwards.

The Group has performed a preliminary assessment of the impact of SG-IFRS 1 First-time adoption of International Financial Reporting Standards for the transition to the new reporting framework. Based on the Group’s preliminary assessment, the Group expects that the impact on adoption of SG-IFRS 15 Revenue from Contracts with Customers and SG-IFRS 9 Financial Instruments will be similar to adopting FRS 115 and FRS 109 as described in this Note.





Convergence with International Financial Reporting Standards (IFRS) (Continued)

Other than arising from the adoption of new and revised standards, the Group does not expect to change its existing accounting policies on adoption of the new framework.

The Group is currently performing a detailed analysis of the available policy choices, transitional optional exemptions and transitional mandatory exceptions under SG-IFRS 1 and the preliminary assessment may be subject to changes arising from the detailed analyses.

Applicable to 2019 financial statements


FRS 116 Leases

FRS 116 eliminates the lessee’s classification of leases as either operating leases or finance leases and introduces a single lessee accounting model. Applying the new model, a lessee is required to recognise right-of-use (ROU) assets and lease liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

FRS 116 substantially carries forward the lessor accounting requirements in FRS 17 Leases. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for these two types of leases using the FRS 17 operating lease and finance lease accounting models respectively. However, FRS 116 requires more extensive disclosures to be provided by a lessor.

When effective, FRS 116 replaces existing lease accounting guidance, including FRS 17, INT FRS 104 Determining whether an Arrangement contains a Lease; INT FRS 15 Operating Leases – Incentives; and INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

FRS 116 is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted if FRS 115 is also applied.

Based on initial assessment, the Group expects changes to its accounting policies on lease accounting with the adoption of FRS 116, for leases currently classified as operating leases. However, there are no significant adjustments to the Group’s financial statements expected.



4 PROPERTY, PLANT AND EQUIPMENT

Note

Leasehold

property

Buildings

and civil

works

Plant,

machinery

and

equipment

Office

equipment,

furniture

and fittings Computers

Motor

vehicles and

transport

equipment

Assets

under

construction Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Cost

At 1 January 2015 415 23,159 24,413 1,293 1,530 14,503 131 65,444

Additions – – 229 108 51 3,044 112 3,544

Disposals/write-offs – (7) (211) (16) (944) (1,442) – (2,620)

Effect of movements in exchange rates 4 (105) (342) 2 (3) (337) – (781)

At 31 December 2015 419 23,047 24,089 1,387 634 15,768 243 65,587

Additions – 251 738 19 6 2,340 868 4,222

Reclassification – 202 37 – – – (239) –

Reclassification to intangible assets 6 – – – – – – (174) (174)

Disposals/write-offs – (728) (567) (223) – (2,055) – (3,573)

Effect of movements in exchange rates (18) (57) (101) (32) – (133) (16) (357)

At 31 December 2016 401 22,715 24,196 1,151 640 15,920 682 65,705

Accumulated depreciation and

impairment losses

At 1 January 2015 176 21,698 17,903 861 1,424 4,537 – 46,599

Depreciation for the year 19 405 1,037 70 43 3,194 – 4,768

Impairment loss – – 1,441 45 54 – – 1,540

Disposals/write-offs – (5) (106) (15) (942) (1,228) – (2,296)

Effect of movements in exchange rates 1 (47) (69) 2 (1) (109) – (223)

At 31 December 2015 196 22,051 20,206 963 578 6,394 – 50,388

Depreciation for the year 18 436 817 189 23 2,875 – 4,358

Disposals/write-offs – (651) (564) (117) – (1,803) – (3,135)

Effect of movements in exchange rates (9) (41) (50) (11) – (45) – (156)

At 31 December 2016 205 21,795 20,409 1,024 601 7,421 – 51,455

Carrying amounts

At 1 January 2015 239 1,461 6,510 432 106 9,966 131 18,845

At 31 December 2015 223 996 3,883 424 56 9,374 243 15,199

At 31 December 2016 196 920 3,787 127 39 8,499 682 14,250



4 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

During the year, the Group acquired property, plant and equipment with an aggregate cost of $4,126,000 (2015: $3,544,000), of which $1,457,000 (2015: $2,404,000) were acquired under finance leases.

Impairment loss

In the prior year, as the Specialty Polymer CGU continued to incur losses, the Group re-assessed the recoverable amount of the Specialty Polymer CGU and recognised an impairment loss of $1,540,000 in respect of the property, plant and equipment in profit or loss under other expenses.

The recoverable amount of the Specialty Polymer CGU was determined based on value in use calculation. This calculation uses cash flow projections based on the financial budget approved by management covering a four-year period (the remaining useful lives of the underlying property, plant and equipment in the CGU).

Key assumptions used in discounted cash flow projection calculations

Key assumptions used in the calculation of recoverable amount of the Specialty Polymer CGU are discount rate and sales volume growth rate. The values assigned to the key assumptions represented management’s assessment of future trends in the specialty polymer industry and were based on both external and internal sources (e.g. historical data) of information. The key assumptions were as follows:

2015%

Discount rate 7.22Sales volume growth rate Nil

Management determined zero growth rate over sales volume based on its expectation of future market development and the contracted volumes with its customers to be appropriate. The discount rates used are pre-tax and reflect specific risks associated with the Specialty Polymer CGU. No terminal value was assumed.




Note

Buildings

and civil

works

Plant,

machinery

and

equipment

Office

equipment,

furniture

and fittings Computers

Motor

vehicles and

transport

equipment

Assets

under

construction Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Company

Cost

At 1 January 2015 17,211 14,638 836 1,065 746 131 34,627

Additions – 97 7 16 780 88 988

Disposals/write-offs – (4) – (911) (238) – (1,153)

At 31 December 2015 17,211 14,731 843 170 1,288 219 34,462

Additions – 89 4 6 471 – 570

Reclassifications – 37 – – – (37) –

Reclassification to

intangible assets 6 – – – – – (174) (174)

Disposals/write-offs – (204) (14) – (92) – (310)

At 31 December 2016 17,211 14,653 833 176 1,667 8 34,548

Accumulated depreciation

At 1 January 2015 17,211 12,862 542 1,030 603 – 32,248

Depreciation for the year – 254 35 21 107 – 417

Disposals/write-offs – (4) – (909) (238) – (1,151)

At 31 December 2015 17,211 13,112 577 142 472 – 31,514

Depreciation for the year – 266 37 17 264 – 584

Disposals/write-offs – (204) (14) – (92) – (310)

At 31 December 2016 17,211 13,174 600 159 644 – 31,788

Carrying amounts

At 1 January 2015 – 1,776 294 35 143 131 2,379

At 31 December 2015 – 1,619 266 28 816 219 2,948

At 31 December 2016 – 1,479 233 17 1,023 8 2,760

At 31 December, the net carrying amount of property, plant and equipment acquired under finance leases is as follows:

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Plant, machinery and equipment 1,766 1,546 – –Motor vehicles 7,257 8,652 570 636




Source of estimation uncertainty

Property, plant and equipment are depreciated on a straight-line basis over its useful economic lives. Management estimates the useful economic lives of property, plant and equipment to be between 3 to 31 years. The Group reviews annually the estimated useful economic lives of property, plant and equipment based on factors that include asset utilisation, internal technical evaluation, technological changes and anticipated use of the assets. It is possible that future results of operations could be materially affected by changes in these estimates brought about by changes in factors mentioned. A reduction in the estimated useful economic lives of property, plant and equipment would increase depreciation expense and decrease non-current assets.

5 SUBSIDIARIES

Company2016 2015$’000 $’000

Equity investments at cost 56,802 51,774Accumulated impairment losses (45,201) (45,201)

11,601 6,573

Loans to subsidiaries 60,118 54,604Accumulated impairment losses (17,244) (13,844)

42,874 40,760

Interest in subsidiaries 54,475 47,333

The loans to subsidiaries are non-trade in nature, unsecured and interest-free. The settlement of the loans are neither planned nor likely to occur in the foreseeable future. As the loans are, in substance, a part of the Company’s net investment in subsidiaries, they are classified as non-current and stated at cost less accumulated impairment losses.

Impairment loss

The carrying value of investments in subsidiaries is tested for impairment whenever there is any objective evidence or indication that the investments may be impaired. This determination requires judgement. In estimating the recoverable amount of the investments, the Company evaluates, amongst other factors, the future profitability of the subsidiaries, their financial health and near-term business outlook, including factors such as industry and sector performance, changes in technology, and operational and financing cash flows.

During the year, the Group re-assessed the recoverable amount of its investment in a subsidiary in the Investment segment due to prolonged decline in the fair value of its underlying net assets and recognised an impairment loss of $3,400,000 in the Company’s profit or loss. The recoverable amount was estimated using the fair value less costs to sell approach, taking into consideration the estimated fair values of its underlying net assets, which comprise mainly assets and liabilities measured at fair value.



5 SUBSIDIARIES (CONTINUED)

Impairment loss (Continued)

In the prior year, as the Specialty Polymer CGU continued to incur losses, the Group re-assessed the recoverable amount of the investment in subsidiary in the Specialty Polymer CGU and recognised an impairment loss of $2,934,000 in the Company’s profit or loss. The recoverable amount was determined based on value in use calculation. This calculation uses cash flow projections based on the financial budget approved by management covering a four-year period (the remaining useful lives of the underlying property, plant and equipment in the CGU).

Key assumptions used in discounted cash flow projection calculations

Key assumptions used in the calculation of recoverable amount of the Specialty Polymer CGU are discount rate and sales volume growth rate. The values assigned to the key assumptions represented management’s assessment of future trends in the specialty polymer industry and were based on both external and internal sources (e.g. historical data) of information. The key assumptions were as follows:

2015%

Discount rate 7.22Sales volume growth rate Nil

Management determined zero growth rate over sales volume based on its expectation of future market and the contracted volumes with its customers to be appropriate. The discount rates used are pre-tax and reflect specific risks associated with the Specialty Polymer CGU. No terminal value was assumed.


The Company maintains impairment losses at a level considered adequate to provide for potential non-recoverability of the investments in subsidiaries, associates and joint ventures. The level of allowance is evaluated by the Company on the basis of factors that affect the recoverability of the investments in subsidiaries, associates and joint ventures. These factors include, but are not limited to, the activities and financial position of the entities and market factors. The Company reviews and identifies balances that are to be impaired on a continuous basis. The amount and timing of recorded expenses for any period would differ if the Company made different judgements or utilised different estimates. An increase in the Company’s impairment losses would increase the Company’s recorded other expenses and decrease the carrying value of interests in subsidiaries, associates and joint ventures.




Details of the subsidiaries are as follows:

Name of subsidiaries Principal activitiesCountry of

incorporation

Effective equity held

by the Group2016 2015

% %

Held by the Company

CemtecAsia (H.K.) Limited(1) Inactive Hong Kong 100 100

CemtecAsia (M) Sdn Bhd(4) Manufacture and sale of construction and building materials

Malaysia 100 100

Pacific Climate Solutions Pte. Ltd. Carbon consultancy services Singapore 100 100

EnGro Global Resources Pte. Ltd. Investment holding Singapore 100 100

S3 Technologies Pte Ltd Manufacture and sale of construction and building materials

Singapore 100 100

Sancem Investment Pte Ltd Investment trading Singapore 100 100

Shanghai S3 Building Materials Co Ltd(3)

Manufacture and sale of construction and building materials

People’s Republic of

China

100 100

SsangYong Cement (S) Pte. Ltd. Sale of building materials Singapore 100 100

e-Invest Limited(2) Investment holding Hong Kong 100 100

Juniper Capital Ventures (Pte) Ltd Investment holding Singapore 100 100

SsangYong Cement Investment (S) Pte. Ltd.

Investment holding Singapore 100 100

SsangYong Cement Singapore (China) Pte Ltd

Investment holding Singapore 100 100

SsangYong LTI (Pte) Ltd Investment holding Singapore 100 100

EnGro (Asia) Private Limited Marketing and distribution of building materials

Singapore 80 80

Shanghai Vcem Commercial Co Ltd(6)

Trading, wholesale and distribution of building materials


China

100 100



Name of subsidiaries Principal activitiesCountry of

incorporation



% %

Held by subsidiaries

EnGro Chemicals Pte. Ltd. Inactive Singapore 100 100

MPT Pacific Technology Sdn Bhd(4) Inactive Malaysia 100 100

Top-Mix Concrete Pte Ltd Manufacture and sale of concrete and other building materials

Singapore 100 100

Top Mix Concrete (Malaysia) Sdn Bhd(2)

Manufacture and sale of concrete and other building materials

Malaysia 100 100

Pelopor Niaga Sdn Bhd(4) Provision and supply of workers Malaysia 100 100

Tianjin Ang De Food & Beverages Management Co., Ltd(8)

Operation of food and beverage outlets


China

100 100

Jointly held by the Company and a subsidiary

R&P (Pte.) Ltd. Manufacture of thermosetting synthetic resin and plastic materials

Singapore 98.57 98.57

Burkill (Singapore) Pte. Ltd. Inactive Singapore 98.57 98.57

Resin & Pigment Technologies Sdn Bhd(5)

Inactive Malaysia 98.57 98.57

Resin & Pigment Technologies (Wuxi) Co Ltd(7)

Inactive People’s Republic of

China

98.57 98.57

KPMG LLP is the auditor of all subsidiaries, except for the following:(1) KT Chan and Company, Hong Kong.(2) Member firms of KPMG International in the respective country of incorporation.(3) Shanghai Huiya Certified Public Accountants, China.(4) Kudos Ling Chuo & Lim, Malaysia.(5) SQ Morrison, Malaysia.(6) Inactive company and thus not required to be audited by laws of country of incorporation.(7) Wuxi Taibo Public Accountants Partnership.(8) Beijing DongShen DingLi International Certified Public Accountants Co., Ltd.




6 INTANGIBLE ASSETS

Note SoftwareFranchise

rights Total$’000 $’000 $’000

GroupCostAt 1 January 2015 and 31 December 2015 – 333 333Reclassification from property, plant and

equipment 4 174 – 174

At 31 December 2016 174 333 507

Accumulated amortisationAt 1 January 2015 – – –Amortisation for the year – 5 5

At 31 December 2015 – 5 5Amortisation for the year 43 34 77

At 31 December 2016 43 39 82

Carrying amountsAt 1 January 2015 – 333 333

At 31 December 2015 – 328 328

At 31 December 2016 131 294 425

Note Software$’000

CompanyCostAt 1 January 2015 and 31 December 2015 –Reclassification from property, plant and equipment 4 174

At 31 December 2016 174

Accumulated amortisationAt 1 January 2015 and 31 December 2015 –Amortisation for the year 43


Carrying amountsAt 1 January 2015 and 31 December 2015 –




7 ASSOCIATES AND JOINT VENTURES

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

AssociatesEquity investments at cost 2,436 2,436 320 320Loan to an associate 15,213 15,213 15,213 15,213Share of reserves* 4,698 3,699 – –

22,347 21,348 15,533 15,533

Joint venturesEquity investments at cost 57,629 57,317 45,022 44,710Share of reserves* 21,120 22,342 – –

78,749 79,659 45,022 44,710

101,096 101,007 60,555 60,243

* Included in share of reserves is the Group’s share of statutory common reserves of its associates and joint ventures of $15,694,000 (2015: $15,031,000) that are not distributable as cash dividends.

The loan to an associate is non-trade in nature, unsecured and interest-free. The settlement of the amount is neither planned nor likely to occur in the foreseeable future. As the loan is in substance, a part of the Group’s net investment in the associate, it is classified as non-current and stated at cost less accumulated impairment losses.

Details of the associates and joint ventures are as follows:

Name of associates Principal activitiesCountry of

incorporation



% %

Held by the Company

HBS Investments Pte Ltd(1) Investment holding Singapore 30 30

HB Investments (China) Pte. Ltd.(1) Investment holding Singapore 20 20


Changshu Changlong Concrete Co Ltd (2),(5)

Manufacture and sale of building materials


China

40 40

Changshu Changxin Ready Mix Concrete Co Ltd(2),(5)



China

40 40



Name of joint ventures Principal activitiesCountry of

incorporation



% %

Held by the Company

Jiangsu Huailong Materials Co Ltd(2),(8) Manufacture and sale of specialty cement


China

40 40

Jinan Luxin Materials Co Ltd(2),(9) Manufacture and sale of specialty cement


China

40 40

Tangshan Tanglong Materials Co Ltd(3)

Manufacture and sale of specialty cement


China

40 40

Tangshan TangAng Materials Co Ltd(3)



China

40 40

Wuhan Wuxin Materials Co Ltd(10) Manufacture and sale of specialty cement


China

33 33

Xin-shan Ang-de (Zibo) Materials Co., Ltd.(7)



China

40 –


VCEM Materials Co Ltd(4) Manufacture and sale of specialty cement

South Korea 40 40

Changshu Changyin Ready Mix Concrete Co Ltd(2),(6)



China

40 40

Qingdao Evergreen Materials and Technologies Co Ltd(11)



China

34.40 34.40

7 ASSOCIATES AND JOINT VENTURES (CONTINUED)



The auditors of the associates and joint ventures are as follows:(1) KPMG LLP, Singapore.(2) For consolidation purposes, a member firm of KPMG International performed specified audit procedures

on certain specified significant accounts in accordance with International Standards on Auditing.(3) Zhongxi CPAs (Special General Partnership), China.(4) Member firm of KPMG International in the country of incorporation.(5) Jiangsu Xinrui Certified Public Accountants Co., Limited, China.(6) Suzhou Fangben Certified Public Accountants Changsu Xinlian Branch.(7) Inactive company and thus not required to be audited by laws of country of incorporation.(8) Talent CPAs (Special General Partnership).(9) Pan-China CPAs (Special General Partnership).(10) BDO China Shu Lun Pan Certified Public Accountants LLP.(11) Grant Thornton CPAs, Shandong.

Associates

The Group has interest in one (2015: one) associate which is considered to be material and a number of associates that are individually immaterial to the Group. All associates are equity accounted.

HB Investments (China) Pte. Ltd.

Nature of relationship with the Group Investment in property and real estatePrincipal place of business/Country of incorporation SingaporeOwnership interest/Voting rights held 20% (2015: 20%)





Associates (Continued)

The following summarises the financial information of the Group’s material associate based on its financial statements prepared in accordance with FRS. The table also analyses, in aggregate, the carrying amount and share of results and other comprehensive income of the remaining individually immaterial associates.

HB Investments (China)

Pte. Ltd.Immaterial associates Total

2016 $’000 $’000 $’000

Revenue –

Profit from continuing operations 1,255Other comprehensive income 2,030

Total comprehensive income 3,285

Non-current assets 67,417Current assets 237Non-current liabilities (76,066)Current liabilities (11)

Net assets (8,423)Add: Non-current liabilities 76,066*

Adjusted net assets 67,643

Group’s interest in net assets of investee at beginning of the year 12,871 8,477 21,348

Group’s share of:– profit from continuing operations 251 615 866– other comprehensive income 406 (273) 133

– total comprehensive income 657 342 999

Carrying amount of interest in investee at end of the year 13,528 8,819 22,347

* The non-current liabilities of the associate are, in substance, part of the net investment in the associate. Settlement of the amounts is neither planned nor likely to occur in the foreseeable future.




HB Investments (China)

Pte. Ltd.Immaterial associates Total

2015 $’000 $’000 $’000

Revenue –

Loss from continuing operations (8,265)Other comprehensive income 4,605

Total comprehensive income (3,660)

Non-current assets 64,112Current assets 248Non-current liabilities (76,066)Current liabilities (11)

Net assets (11,717)Add: Non-current liabilities 76,066*

Adjusted net assets 64,349

Group’s interest in net assets of investee at beginning of the year 13,603 7,857 21,460

Group’s share of:– (loss)/profit from continuing operations (1,653) 988 (665)– other comprehensive income 921 232 1,153

– total comprehensive income (732) 1,220 488

Dividends recognised during the year – (600) (600)

Carrying amount of interest in investee at end of the year 12,871 8,477 21,348

* The non-current liabilities of the associate are, in substance, part of the net investment in the associate. Settlement of the amounts is neither planned nor likely to occur in the foreseeable future.

Joint ventures

Jiangsu Huailong Materials Co Ltd, Jinan Luxin Materials Co Ltd and Wuhan Wuxin Materials Co Ltd are joint arrangements in which the Group has joint control via investors’ agreement and holds 40%, 40% and 33% (2015: 40%, 40% and 33%) ownership interest respectively. These investees are incorporated in the People’s Republic of China, principally engaged in the manufacture and sale of specialty cement.

Jiangsu Huailong Materials Co Ltd, Jinan Luxin Materials Co Ltd and Wuhan Wuxin Materials Co Ltd are structured as separate vehicles and the Group has residual interests in their net assets. Accordingly, the Group classified its interests in these investees as joint ventures, which are equity-accounted.

The following summarises the financial information of each of the Group’s material joint ventures based on their respective financial statements prepared in accordance with FRS. The table also analyses, in aggregate, the carrying amount and share of results and other comprehensive income of the individually immaterial joint ventures.




Jiangsu Huailong Materials

Co Ltd

Jinan Luxin Materials

Co Ltd

Wuhan Wuxin

Materials Co Ltd

Immaterial joint

ventures Total2016 $’000 $’000 $’000 $’000 $’000

Revenue 26,400 67,319 59,001

Profit from continuing operationsa 2,178 2,950 712

Other comprehensive income (918) (1,918) (1,112)

Total comprehensive income 1,260 1,032 (400)a Includes:– depreciation 2,709 5,087 3,974– income tax expense 846 631 138– interest expense – – 888

Non-current assets 13,188 39,710 74,275Current assetsb 21,063 28,570 48,559Non-current liabilities – – (998)Current liabilities (4,624) (10,998) (79,834)

Net assets 29,627 57,282 42,002

Includesb Cash and cash equivalents 8,603 9,518 15,488

Group’s interest in net assets of investee at beginning of the year 11,396 23,676 15,099 29,488 79,659

Group’s share of:– profit from continuing

operations 871 1,180 235 1,732 4,018– other comprehensive income (367) (767) (367) (793) (2,294)

– total comprehensive income 504 413 (132) 939 1,724

Dividends recognised during the year – (1,176) (1,106) (352) (2,634)

Carrying amount of interest in investee at end of the year 11,900 22,913 13,861 30,075 78,749




Jiangsu Huailong Materials

Co Ltd

Jinan Luxin Materials

Co Ltd

Wuhan Wuxin

Materials Co Ltd

Immaterial joint

ventures Total2015 $’000 $’000 $’000 $’000 $’000

Revenue 24,104 70,968 73,473

(Loss)/Profit from continuing operationsa (3,048) 2,778 94

Other comprehensive income 338 593 542

Total comprehensive income (2,710) 3,371 636a Includes:– depreciation 3,211 4,523 3,940– income tax (credit)/expense (1,007) 589 87

Non-current assets 17,555 45,722 75,873Current assetsb 14,285 21,652 24,346Non-current liabilities – – (1,917)Current liabilities (3,342) (8,183) (52,549)

Net assets 28,498 59,191 45,753

Includesb Cash and cash equivalents 2,803 2,774 2,631

Group’s interest in net assets of investee at beginning of the year 12,942 23,598 16,176 29,687 82,403

Group’s share of:– (loss)/profit from continuing

operations (1,219) 1,111 31 44 (33)– other comprehensive income 135 236 179 (9) 541

– total comprehensive income (1,084) 1,347 210 35 508

Dividends recognised during the year (462) (1,269) (1,287) (234) (3,252)

Carrying amount of interest in investee at end of the year 11,396 23,676 15,099 29,488 79,659



8 OTHER INVESTMENTS

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Non-current investmentsAvailable-for-sale financial assets:– Equity securities, quoted 627 3,801 – –– Venture capital funds 14,313 15,598 – –– Equity securities, unquoted 2,802 2,515 1,217 1,217

17,742 21,914 1,217 1,217

Current investmentsConvertible loan 1,447 1,413 – –Financial assets classified as held for

trading:– Equity securities 7,675 8,488 – –– Debt securities 1,228 3,362 – –Financial assets designated as at fair

value through profit or loss:– Equity securities 7,846 7,760 – –– Debt securities 3,521 2,588 – –

21,717 23,611 – –

39,459 45,525 1,217 1,217

An impairment loss of $1,261,000 (2015: $2,957,000) in respect of available-for-sale equity securities of the Group was recognised in profit or loss during the year.

The convertible loan with a carrying amount of $1,447,000 (2015: $1,413,000) at 31 December 2016 bears interest at 8% (2015: 8%) per annum and matures in October 2017.

Information about the Group’s and the Company’s exposures to credit and market risks, and fair value measurement, is included in note 25.



9 OTHER ASSETS

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Club memberships, at cost 238 238 238 238Accumulated impairment losses (141) (66) (141) (66)

97 172 97 172

During the year, the club memberships were impaired by $75,000 (2015: Nil) due to a decline in their market values.

10 INVENTORIES

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

At costRaw materials 2,126 3,245 – –Work in progress – 18 – –Goods-in-transit 2,935 2,850 2,175 2,850Finished goods 5,071 7,612 2,939 5,320

10,132 13,725 5,114 8,170


The Group recognises allowance on inventory obsolescence when inventory items are identified as obsolete and the allowance is charged to profit or loss. Obsolescence is based on the physical and internal condition of inventory items. Obsolescence is also established when inventory items are no longer marketable. In addition to an allowance for specifically identified obsolete inventory, estimation is made on a group basis based on the age of the inventory items. The Group believes such estimates represent a fair charge of the level of inventory obsolescence in a given year. The Group reviews on a monthly basis the condition of its inventory. An increase in the Group’s allowance for obsolescence would increase the Group’s recorded changes in finished goods and decrease its inventories (current assets).



11 TRADE AND OTHER RECEIVABLES

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Non-currentAmounts due from associates and

joint venture, non-trade 1,037 1,607 – –

CurrentTrade receivables due from– Subsidiaries – – 7,524 11,776– Third parties 36,846 40,478 15,792 15,834

36,846 40,478 23,316 27,610Allowance for doubtful receivables (1,526) (842) (246) (299)

Net trade receivables 35,320 39,636 23,070 27,311

Non-trade receivables due from– Joint ventures 620 6,582 139 11– Subsidiaries – – 26,716 42,905Allowance for doubtful receivables – – (4,466) (4,466)

620 6,582 22,389 38,450

Deposits 564 556 28 28Other receivables 2,012 1,608 472 333Dividend receivable from a joint venture 1,106 – 1,106 –Tax recoverable 134 140 – –

Loans and receivables 39,756 48,522 47,065 66,122Prepayments 8,208 3,058 1,947 1,013

47,964 51,580 49,012 67,135

Loans and receivables (non-current and current) 40,793 50,129 47,065 66,122

The non-current amounts due from associates and joint venture pertain to dividends receivable from the associates and joint venture which are unsecured, interest-free and are not expected to be settled within the next twelve months. There is no allowance for doubtful debts arising from these amounts.

In the prior year, a non-trade amount of $6,550,000 due from a joint venture bore interest rate of 6% per annum. The amount was fully repaid during the year.

All other outstanding balances with subsidiaries and joint ventures are unsecured, interest-free and repayable on demand.

The Group’s and the Company’s exposures to credit and currency risks, and impairment losses related to trade and other receivables, are disclosed in note 25.



12 LOAN TO A SUBSIDIARY

The loan to a subsidiary of $5,059,000 (2015: $7,498,000) is unsecured, bear interest at 3% (2015: 3%) per annum and is repayable in 2018.

No impairment loss has been recognised in respect of the loan to a subsidiary.

13 CASH AND CASH EQUIVALENTS

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Fixed deposits 13,751 601 10,033 500Bank balances 25,642 33,020 10,330 10,492

Cash and cash equivalents in the statements of financial position 39,393 33,621 20,363 10,992

Fixed deposits pledged – (500) – (500)

Cash and cash equivalents in the statement of cash flows 39,393 33,121 20,363 10,492

Fixed deposits pledged represented bank balances of the Company pledged as security to obtain credit facilities in the prior year.

The weighted average effective interest rates per annum relating to cash and cash equivalents at 31 December 2016 for the Group and the Company are 0.38% (2015: 0.33%) and 0.42% (2015: 0.06%) per annum respectively.

14 CAPITAL AND RESERVES

Share capital

Ordinary shares2016 2016 2015 2015

No. of shares No. of shares’000 $’000 ’000 $’000

CompanyIn issue at 1 January and 31 December 118,703 85,270 118,703 85,270

All issued shares are fully paid, with no par value.

All shares rank equally with regard to the Company’s residual assets.

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company.



14 CAPITAL AND RESERVES (CONTINUED)

Reserves

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Foreign currency translation reserve 1,236 3,180 – –Fair value reserve 4,913 9,927 – –Share option reserve 154 168 154 168Reserve for own shares (120) (73) (120) (73)Capital reserve (45) (21) (45) (21)Accumulated profits 127,800 125,000 90,123 95,055

133,938 138,181 90,112 95,129

Foreign currency translation reserve

The foreign currency translation reserve comprises foreign currency differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company, as well as foreign exchange differences on monetary items which form part of the Group’s net investment in foreign operations, provided certain conditions are met.

Fair value reserve

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised or impaired.

Share option reserve

The share option reserve comprises the cumulative value of employee services received for the issue of share options.

Reserve for own shares

The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group, which is recorded as a deduction of equity. As at 31 December 2016, the Group held 134,200 (2015: 75,000) of the Company’s shares.

Capital reserve

Capital reserve arises from the difference between proceeds from the disposal of treasury shares and the cost of the treasury shares disposed.



15 EMPLOYEE SHARE OPTIONS

Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option Scheme (the “ESOS 2000”)

The Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option Scheme (the “ESOS 2000”) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 15 January 2001. The ESOS 2000 is administered by the Company’s Remuneration Committee comprising three directors, Ronnie Teo Heng Hock (Chairman), Soh Kim Soon and Ng Tat Pun.


(a) Options were granted on 1 December 2006 (Option 1), 8 January 2008 (Option 2) and 30 March 2009 (Option 3).

(b) The exercise prices of the options are set at $0.75 per share (Option 1), $1.17 per share (Option 2) and $0.55 per share (Option 3).

(c) The options can be exercised after 1 December 2007 (Option 1), 8 January 2009 (Option 2) and 30 March 2010 (Option 3).

(d) The options granted shall expire on 1 December 2016 (Option 1), 8 January 2018 (Option 2) and 30 March 2019 (Option 3).

Option 1 expired on 1 December 2016 while Option 3 had been fully exercised in prior year.

EnGro Corporation Limited 2011 Employees’ Share Option Scheme (the “ESOS 2011”)

The EnGro Corporation Limited 2011 Employees’ Share Option Scheme (the “ESOS 2011”) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 27 April 2011. The ESOS 2011 is administered by the Company’s Remuneration Committee, comprising three directors, Ronnie Teo Heng Hock (Chairman), Soh Kim Soon and Ng Tat Pun.


(a) Option was granted on 18 April 2012.

(b) The exercise price of the option is set at $0.79 per share.

(c) The option can be exercised after 18 April 2013.

(d) The option granted shall expire on 18 April 2022.



15 EMPLOYEE SHARE OPTIONS (CONTINUED)

Movements in the number of share options and their related weighted average exercise prices are as follows:

2016 2015Weighted average exercise

priceNo. of

options

Weighted average exercise

priceNo. of

options$ ‘000 $ ‘000

Outstanding at 1 January 1.05 1,232 1.02 1,282Forfeited 0.75 (142) 1.17 (50)Exercised 0.75 (145) – –

Outstanding at 31 December 1.09 945 1.05 1,232

Exercisable at 31 December 1.09 945 1.05 1,232

The details of shares issued from the exercising of share options are as follows:

2016 2015

Options exercised and exercise price

No. of ordinary shares issued

No. of treasury shares issued

No. of ordinary shares issued

No. of treasury shares issued

’000 ’000 ’000 ’000

ESOS 2000Option 1 – $0.75 each – 145 – –

At 31 December 2016, outstanding share options granted under its Ssangyong Cement (Singapore) Ltd 2000 Employees’ Share Option Scheme amounted 740,000 shares (2015: 1,027,500 shares) and under its EnGro Corporation Limited 2011 Employees’ Share Option Scheme amounted to 205,000 shares (2015: 205,000 shares).

Fair value of share options and assumptions

The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted. The estimate of the fair value of the services received is measured based on the Black-Scholes formula. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.



15 EMPLOYEE SHARE OPTIONS (CONTINUED)

Fair value of share options and assumptions (Continued)

ESOS 2000 ESOS 2011

Option 1 Option 2 Option 3

Date of grant of options1 December

20068 January

200830 March

200918 April

2012

Fair value at measurement date $0.10 $0.14 $0.08 $0.15

Share price $1.12 $1.17 $0.55 $0.79Exercise price $1.13 $1.17 $0.55 $0.79Exercise price adjusted $0.75 – – –Expected volatility 19.4% 31.6% 32.6% 42.1%Expected option life 5 years 5 years 5 years 5 yearsExpected dividends 5.38% 7.64% 6.02% 6.66%Risk-free interest rate 3.01% 2.39% 2.04% 1.53%

The expected volatility is based on the historic volatility (calculated based on the weighted average expected life of the share options), adjusted for any expected changes to future volatility due to publicly available information.

There are no market conditions associated with the share option grants. Service conditions and non-market performance conditions are not taken into account in the measurement of the fair value of the services to be received at the grant date.

16 LOANS AND BORROWINGS

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Non-current liabilitiesLoan from a non-controlling

interest of a subsidiary 1,145 – – –Finance lease liabilities 5,774 7,291 244 433

6,919 7,291 244 433

Current liabilitiesLoans from subsidiaries – – 12,312 11,653Loan from a non-controlling

interest of a subsidiary – 1,871 – –Trust receipts 1,273 – 1,273 –Finance lease liabilities 2,360 2,569 190 214

3,633 4,440 13,775 11,867

10,552 11,731 14,019 12,300

The loans from subsidiaries and a non-controlling interest of a subsidiary are unsecured, interest-free and repayable on demand.

Information about the Group’s and the Company’s exposures to interest rate, foreign currency and liquidity risks are disclosed in note 25.



16 LOANS AND BORROWINGS (CONTINUED)

Terms and debt repayment schedule

Terms and conditions of outstanding loans and borrowings, excluding loans from subsidiaries, are as follows:

2016 2015Nominal

interest rateYear of maturity

Face value

Carrying amount

Face value

Carrying amount

% $’000 $’000 $’000 $’000

GroupLoan from a non-

controlling interest of a subsidiary – 2018 1,145 1,145 1,871 1,871

Trust receipts 2.17% 2017 1,279 1,273 – –Finance lease liabilities 1.30% – 3.52% 2017 – 2021 8,689 8,134 10,534 9,860

11,113 10,552 12,405 11,731

CompanyTrust receipts 2.17% 2017 1,279 1,273 – –Finance lease liabilities 1.50% 2018 452 434 680 647

1,731 1,707 680 647

Finance lease liabilities

Finance lease liabilities are payable as follows:

2016 2015

Future minimum

lease payments

Present value of

minimum lease

payments

Future minimum

lease payments

Present value of

minimum lease

payments$’000 $’000 $’000 $’000

Group

Within one year 2,619 2,360 2,858 2,569Between two to five years 6,070 5,774 7,671 7,286More than five years – – 5 5

8,689 8,134 10,534 9,860

Less: Future finance charges (555) (674)

Present value of obligation 8,134 9,860

Company

Within one year 200 190 228 214Between two to five years 252 244 452 433

452 434 680 647

Less: Future finance charges (18) (33)

Present value of obligation 434 647



17 DEFERRED TAX (ASSETS)/LIABILITIES

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. Movements in deferred tax liabilities of the Group during the year, after appropriate offsetting, are as follows:

At 1 January

2016

Recognised in profit or loss

(note 21)Withholding

tax paid

At 31 December

2016$’000 $’000 $’000 $’000

GroupProperty, plant and equipment (29) – – (29)

Withholding tax on share of profits of associates and joint ventures 655 172 (71) 756

At 1 January

2015

Recognised in profit or loss

(note 21)Withholding

tax paid

At 31 December

2015$’000 $’000 $’000 $’000

GroupProperty, plant and equipment 71 (100) – (29)

Withholding tax on share of profits of associates and joint ventures 926 (117) (154) 655

Deferred tax assets have not been recognised in respect of the following items:Group

2016 2015$’000 $’000

Unabsorbed tax losses 33,377 33,004Unabsorbed wear and tear allowances 475 475Deductible temporary differences 12,170 9,818

46,022 43,297

Unutilised donations 2,263 2,035

The tax losses and unabsorbed wear and tear allowances at 31 December 2016 are available for carry forward and set off against future taxable income subject to agreement with the Comptroller of Income Tax and compliance with Section 37 of the Income Tax Act Chapter 134. Certain of the Group’s subsidiaries’ unabsorbed tax losses are subject to agreement by the local tax authorities and compliance with tax regulations in the respective countries in which the subsidiaries operate in. The deductible temporary differences do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items in accordance with the Group’s accounting policy as set out in note 3.13.



18 TRADE AND OTHER PAYABLES

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Trade payables:– Third parties 11,771 11,822 2,599 2,481– Joint ventures – 832 – 832Advances received from:– Third parties 39 505 – 500– Joint ventures 4 – – –Accrued expenses 8,524 7,336 4,727 4,375Dividend payable – 4,358 – 4,358Non–trade payables due to:– Subsidiaries – – 332 339Other payables 2,543 1,832 1,724 124

22,881 26,685 9,382 13,009

The amounts due to joint ventures and subsidiaries are unsecured, interest-free and repayable on demand.

The Group’s and the Company’s exposures to currency and to liquidity risks related to trade and other payables are disclosed in note 25.

19 REVENUE

Revenue of the Group represents net sales of goods billed to external customers. Transactions within the Group are eliminated.

20 FINANCE INCOME AND FINANCE COSTS

Group2016 2015$’000 $’000

Finance incomeDividend income from:– Financial assets held for trading 286 344– Available-for-sale financial assets 150 500Interest income 766 162Other investment income 220 1,110Net change in fair value of financial assets:– Held for trading 238 156– Designated as at fair value through profit or loss 507 499Net change in fair value of available-for-sale financial assets reclassified to

profit or loss– Gain on disposal of available-for-sale financial assets 3,466 56Exchange gains 46 1,049

5,679 3,876



20 FINANCE INCOME AND FINANCE COSTS (CONTINUED)

Group2016 2015$’000 $’000

Finance costsInterest expense on trust receipts (90) –Interest expense on finance lease liabilities (325) (454)Impairment loss on available-for-sale financial assets (1,261) (2,957)

(1,676) (3,411)

Net finance income 4,003 465

21 TAX EXPENSE

Group2016 2015$’000 $’000

Current tax expenseCurrent year 667 568Under/(Over) provided in prior years 132 (45)

799 523

Deferred tax expense/(credit)Origination and reversal of temporary differences 172 (196)Over provided in prior years – (21)

172 (217)

971 306

Reconciliation of effective tax rate

Profit/(Loss) before tax 6,852 (5,139)Less: Share of (profit)/loss of associates and joint ventures (net of tax) (4,884) 698

1,968 (4,441)

Tax using the Singapore tax rate of 17% (2015: 17%) 335 (755)Effect of tax rates in foreign jurisdictions 210 179Non-deductible expenses 444 191Tax exempt income (785) (158)Utilisation of deferred tax benefits previously not recognised (226) (160)Tax on/(Reversal of tax on) unremitted profits 172 (117)Unrecognised deferred tax assets 689 1,192Under/(Over) provided in prior years 132 (66)

971 306



22 PROFIT/(LOSS) FOR THE YEAR

The following items have been included in arriving at profit/(loss) for the year:

Group2016 2015$’000 $’000

Allowance for doubtful receivables 688 501Bad debts recovered (18) (13)Impairment loss on property, plant and equipment – 1,540Gain on disposal of property, plant and equipment (230) (362)Compensation income received from early termination of

a contract by a customer – (2,649)Contributions to defined contribution plans 1,819 1,479Audit fees paid to:– auditors of the Company 341 427– other auditors 37 33Non-audit fees paid to:– auditors of the Company 50 51Operating lease expense 2,854 2,900

23 EARNINGS PER SHARE

Basic earnings per share

The calculation of basic earnings per share at 31 December 2016 was based on the profit attributable to ordinary shareholders of $5,768,000 (2015: loss attributable to ordinary shareholders of $5,283,000), and a weighted average number of ordinary shares outstanding of 118,631,000 (2015: 118,682,000), calculated as follows:

Weighted average number of ordinary shares

Group2016 2015

No. of shares No. of shares’000 ’000

Issued ordinary shares at 1 January (excluding treasury shares) 118,628 118,684Effect of share options exercised 114 –Effect of own shares held (111) (2)

Weighted average number of ordinary shares during the year 118,631 118,682



23 EARNINGS PER SHARE (CONTINUED)

Diluted earnings per share

The calculation of diluted earnings per share at 31 December 2016 was based on profit attributable to ordinary shareholders of $5,768,000, and a weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares of 118,678,000, calculated as follows:

Weighted average number of ordinary shares (diluted)

Group2016 2015

Profit/(Loss) attributable to owners of Company ($’000) 5,768 (5,283)

Weighted average number of ordinary shares (basic) (’000) 118,631 118,682Potential ordinary shares issuable under share options (’000) 47 –

Weighted average number of ordinary shares (diluted) during the year (’000) 118,678 118,682

Basic earnings/(loss) per share (cents) 4.86 (4.45)

The potential ordinary shares issuable under share options were excluded from the diluted weighted average number of ordinary shares calculation for the year ended 31 December 2015 because their effect would decrease loss per share and have an anti-dilutive effect.

24 OPERATING SEGMENTS

The Group has four reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products or services, and are managed separately. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a monthly basis. The following summary describes the operations in each of the Group’s reportable segments:

– Cement and building materials: Manufacture and sale of cement, ready-mix concrete and building materials.

– Specialty polymer: Manufacture and sale of thermosetting synthetic resin and plastic materials.

– Investments: Trading of equity securities, debt securities and holding of investments in venture capital funds and equity securities.

– Food and beverage: Operation of food and beverage outlets under franchise.

Other operations include the provision of carbon consultancy services. None of these segments meets any of the quantitative thresholds for determining reportable segments in 2016 or 2015.



24 OPERATING SEGMENTS (CONTINUED)

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group’s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-earning fixed deposits and interest income, interest-bearing loans, borrowings and interest expenses and tax assets and liabilities. Inter-segment pricing is determined on an arm’s length basis.

Information about reportable segments

Cement and

building materials

Specialty polymer Investments

Food & Beverage Others Total

$’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses2016External revenues, representing

consolidated revenue 125,569 25,933 – 1,795 – 153,297

Dividend income – – 436 – – 436

Reportable segment profit/(loss) before tax 3,393 303 3,224 (1,178) – 5,742

Share of profit of associates and joint ventures 4,825 – 59 – – 4,884

8,218 303 3,283 (1,178) – 10,626

Headquarter expense (4,125)Interest expense (415)Interest income 766Tax expense (971)

Profit for the year 5,881

2015External revenues, representing

consolidated revenue 165,475 14,513 – 774 8 180,770

Dividend income – – 844 – – 844

Reportable segment profit/(loss) before tax 3,457 (2,174) 1,070 (1,379) – 974

Share of profit/(loss) of associates and joint ventures 961 – (1,659) – – (698)

4,418 (2,174) (589) (1,379) – 276

Headquarter expense (5,123)Interest expense (454)Interest income 162Tax expense (306)

Loss for the year (5,445)




Information about reportable segments (Continued)

Cement and

building materials

Specialty polymer Investments

Food &Beverage Others Total

$’000 $’000 $’000 $’000 $’000 $’000

Assets and liabilities2016Total assets for reportable segments 57,462 14,860 62,978 3,556 45 138,901Investments in associates and

joint ventures 101,096Other unallocated amounts 13,885

Consolidated total assets 253,882

Total liabilities for reportable segments 25,997 4,706 66 242 5 31,016

Other unallocated amounts 3,535

Consolidated total liabilities 34,551

2015Total assets for reportable segments 62,725 12,562 82,961 2,747 50 161,045Investments in associates and

joint ventures 101,007Other unallocated amounts 741


Total liabilities for reportable segments 32,865 3,248 1,586 711 5 38,415

Other unallocated amounts 865

Consolidated total liabilities 39,280

Other segment information2016Capital expenditure 4,187 26 – 9 – 4,222

Depreciation and amortisation 4,290 2 – 143 – 4,435

Impairment loss on available-for-sale financial assets – – 1,261 – – 1,261

2015Capital expenditure 2,912 17 – 615 – 3,544

Depreciation and amortisation 4,363 346 – 64 – 4,773

Impairment loss on available-for-sale financial assets – – 2,957 – – 2,957




Reconciliation of reportable segment profit or loss

2016 2015$’000 $’000

Profit or lossTotal profit for reportable segments 5,742 974Unallocated amounts (3,774) (5,415)Share of profit/(loss) of associates and joint ventures 4,884 (698)

Consolidated profit/(loss) before tax 6,852 (5,139)

Geographical segments

The Group’s operations are mainly in Singapore, Malaysia and People’s Republic of China. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.

Singapore Malaysia

People’s Republic of China Others Elimination Total

$’000 $’000 $’000 $’000 $’000 $’000

2016External customers 92,416 33,686 25,431 1,764 – 153,297Inter-segment revenue 14,449 1,921 – – (16,370) –

Total revenue 106,865 35,607 25,431 1,764 (16,370) 153,297

Total assets for reportable segments 107,343 20,743 10,815 – – 138,901

Investments in associates and joint ventures 101,096

Other unallocated amounts 13,885


2015External customers 122,330 42,289 16,151 – – 180,770Inter-segment revenue 27,984 1,592 – – (29,576) –

Total revenue 150,314 43,881 16,151 – (29,576) 180,770

Total assets for reportable segments 137,486 18,055 5,504 – – 161,045

Investments in associates and joint ventures 101,007

Other unallocated amounts 741





Major customer

Revenues from one customer of the Group’s specialty polymer segment represent approximately $20,909,000 (2015: $12,748,000) of the Group’s total revenues.

25 FINANCIAL INSTRUMENTS

Financial risk management

Overview

The Group has exposure to the following risks from its use of financial instruments:

• credit risk• liquidity risk• market risk

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and managing risk, and the Group’s management of capital.

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Group Audit Committee.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.

The carrying amounts of financial assets in the statements of financial position represents the Group and the Company’s respective maximum exposures to credit risk, before taking into account any collateral held. The Group and the Company do not hold any collateral in respect of its financial assets.



25 FINANCIAL INSTRUMENTS (CONTINUED)

Credit risk (Continued)

Guarantees

The Group’s policy is to provide financial guarantees only for subsidiaries’ liabilities.

The maximum exposure of the Company in respect of the intra-group financial guarantee at the reporting date is if the facility is drawn down by the subsidiary in the amount of $10,489,000 (2015: $4,592,000). At the reporting date, the Company does not consider it probable that a claim will be made against the Company under the intra-group financial guarantee.

Trade and other receivables

Concentration of credit risk relating to trade receivables is limited due to the Group’s many varied customers. The Group’s historical experience in the collection of trade receivables falls within the recorded allowances. Due to these factors, management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the Group’s trade receivables.

The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit, taking into account their financial position, past payment experience with the Group and available independent ratings.

Exposure to credit risk

The maximum exposure to credit risk at the reporting date was as follows:

Group CompanyNote 2016 2015 2016 2015

$’000 $’000 $’000 $’000

Convertible loan 8 1,447 1,413 – –Financial assets classified as

held for trading– Debt securities 8 1,228 3,362 – –Financial assets designated as

at fair value through profit or loss

– Debt securities 8 3,521 2,588 – –Loans and receivables 11 40,793 50,129 47,065 66,122Loans to a subsidiary 12 – – 5,059 7,498Cash and cash equivalents 13 39,393 33,621 20,363 10,992

Recognised financial assets 86,382 91,113 72,487 84,612





Trade and other receivables (Continued)

Exposure to credit risk (Continued)

The ageing of loans and receivables (excluding cash & cash equivalents) at the reporting date was:

2016 2015

GrossImpairment

losses GrossImpairment

losses$’000 $’000 $’000 $’000

GroupNot past due 30,843 – 27,696 –Past due 0 – 30 days 6,911 – 11,087 –Past due 31 – 90 days 2,283 (208) 8,614 –Past due 91 days 2,282 (1,318) 3,574 (842)

42,319 (1,526) 50,971 (842)

CompanyNot past due 42,890 (4,466) 70,228 (4,466)Past due 0 – 30 days 5,312 – 4,806 –Past due 31 – 90 days 2,310 – 2,051 –Past due 91 days 6,324 (246) 1,300 (299)

56,836 (4,712) 78,385 (4,765)

An analysis of the credit quality of loans and receivables that are neither past due nor impaired indicates that the balances are of acceptable risk.

Impairment losses

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The component of this allowance is a specific loss component that relates to individually significant exposures.

The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.





Trade and other receivables (Continued)

Impairment losses (Continued)

The movements in the allowance for impairment in respect of loans and receivables (excluding cash and cash equivalents) during the year was as follows:

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

At 1 January 842 436 4,765 496Impairment loss recognised in profit or loss 920 501 – 4,269Amount written back (232) – (53) –Amount utilised (8) (51) – –Translation difference 4 (44) – –

At 31 December 1,526 842 4,712 4,765

Based on historical default rates, the Group believes that no additional impairment allowance is necessary in respect of the Group’s outstanding receivables. These receivables are mainly with customers that have a good payment record with the Group.

At 31 December 2016, the Group’s exposure to credit risk primarily comprises $20,824,000 (2015: $29,021,000), $9,760,000 (2015: $10,410,000) and $9,878,000 (2015: $10,677,000) due from companies in Singapore, People’s Republic of China and Malaysia respectively.

At 31 December 2016, the Group’s exposure to credit risk primarily comprises $29,176,000 (2015: $35,154,000) due from construction companies.


The Group maintains allowance for doubtful accounts at a level considered adequate to provide for potential uncollectible receivables. The level of this allowance is evaluated by the Group on the basis of factors that affect the collectability of the accounts. These factors include, but are not limited to, the length of the Group’s relationship with debtors, their payment behaviour and known market factors. The Group reviews the age and status of receivables and identifies accounts that are to be provided with allowance on a continuous basis. The amount and timing of recorded expenses for any period would differ if the Group made different judgements or utilised different estimates. An increase in the Group’s allowance for doubtful accounts would increase the Group’s recorded operating expenses and decrease its receivables (current assets).

Cash and cash equivalents

The Group and Company held cash and cash equivalents of $39,393,000 and $20,363,000 respectively at 31 December 2016 (2015: $33,621,000 and $10,992,000 respectively), which represents its maximum credit exposure on these assets. The cash and cash equivalents are held with banks and financial institutions which are regulated.




Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. Generally, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

Cash flows

Carrying amount

Contractual cash flows

Within 1 year

Between 2 to 5 years

More than 5 years

$’000 $’000 $’000 $’000 $’000

Group

2016Non-derivative financial

liabilitiesLoan from a non-controlling

interest of a subsidiary 1,145 (1,145) – (1,145) –Finance lease liabilities 8,134 (8,689) (2,619) (6,070) –Trust receipts 1,273 (1,279) (1,279) – –Trade and other payables* 22,838 (22,838) (22,838) – –

33,390 (33,951) (26,736) (7,215) –

2015Non-derivative financial

liabilitiesLoan from a non-controlling

interest of a subsidiary 1,871 (1,871) (1,871) – –Finance lease liabilities 9,860 (10,534) (2,858) (7,671) (5)Trade and other payables* 26,180 (26,180) (26,180) – –

37,911 (38,585) (30,909) (7,671) (5)

* excludes advances received




Liquidity risk (Continued)

Cash flows

Carrying amount

Contractualcash flows

Within1 year

Between2 to 5 years

$’000 $’000 $’000 $’000

Company

2016Non-derivative financial liabilitiesFinance lease liabilities 434 (452) (200) (252)Trust receipts 1,273 (1,279) (1,279) –Trade and other payables* 9,382 (9,382) (9,382) –Loans from subsidiaries 12,312 (12,312) (12,312) –

23,401 (23,425) (23,173) (252)

2015Non-derivative financial liabilitiesFinance lease liabilities 647 (680) (228) (452)Trade and other payables* 12,509 (12,509) (12,509) –Loans from subsidiaries 11,653 (11,653) (11,653) –

24,809 (24,842) (24,390) (452)

* excludes advances received

The maturity analyses show the contractual undiscounted cash flows of the Group and the Company’s financial liabilities on the basis of their earliest possible contractual maturity. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group is exposed to currency risk on sales, purchases, investments and borrowings, including inter-company sales, purchases and inter-company balances that are denominated in a currency other than the respective functional currencies of Group entities. The currencies in which these transactions are denominated are mainly the Singapore dollar, US dollar, China renminbi, Australia dollar.




Market risk (Continued)

Currency risk (Continued)

At 31 December, the Group’s and the Company’s exposure to currencies, other than the respective functional currency of each individual company within the Group, are as follows:

Singapore dollar US dollar

China renminbi

Australian dollar

$’000 $’000 $’000 $’000

Group

2016Trade and other receivables 1,538 227 2,709 –Cash and cash equivalents 419 2,721 1,372 28Other investments 584 17,964 – 322Loan from a non-controlling interest of

a subsidiary – – (1,145) –Trust receipts – (1,273) – –Trade and other payables (1,527) (7) (137) –

1,014 19,632 2,799 350

2015Trade and other receivables 1,157 1,291 8,156 –Cash and cash equivalents 421 5,411 1,278 14Other investments – 18,153 – 409Loan from a non-controlling interest of

a subsidiary – – (350) –Trade and other payables (1,149) (12) (836) –

429 24,843 8,248 423

US dollarChina

renminbi$’000 $’000

Company

2016Trade and other receivables 6,941 4,170Cash and cash equivalents 458 1,311Loans to subsidiaries 39,986 –Trust receipts (1,273) –Trade and other payables (134) –Loans from subsidiaries (9,752) (1,960)

36,226 3,521

2015Trade and other receivables 8,734 8,165Cash and cash equivalents 2,361 1,275Loans to subsidiaries 39,052 7,498Trade and other payables (12) (828)Loans from subsidiaries (9,524) (1,528)

40,611 14,582





Currency risk (Continued)

Sensitivity analysis

A 10% strengthening of the group entities’ functional currencies, as indicated below, against the following currencies at 31 December would have increased/(decreased) equity and profit or loss before tax by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2015, as indicated below:

Group CompanyProfit or loss Equity Profit or loss Equity

$’000 $’000 $’000 $’000

31 December 2016Singapore dollar (101) – – –US dollar (1,959) (4) (3,623) –China renminbi (280) – (352) –Australia dollar (35) – – –

31 December 2015Singapore dollar (43) – – –US dollar (2,464) (20) (4,061) –China renminbi (825) – (1,458) –Australia dollar (42) – – –

A 10% weakening of the Singapore dollar against the above currencies at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Interest rate risk

Exposure to interest rate risk

At the reporting date, the Group’s interest-bearing financial instruments are as follows:

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Financial assets classified as held for trading

– Debt securities 1,228 3,362 – –Financial assets designated at fair value

through profit or loss– Debt securities 3,521 2,588 – –Convertible loan– Debt securities 1,447 1,413

6,196 7,363 – –





Interest rate risk (Continued)

Fair value sensitivity analysis for fixed rate instruments

A change of 100 basis points in interest rates would have increased or decreased profit or loss by approximately $263,000 (2015: $219,000) for the Group. The analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis is performed on the same basis for 2015.

Cash flow sensitivity analysis for variable rate instruments

There is no significant interest rate risk relating to variable rate instruments.

Equity price risk

Sensitivity analysis

For investments classified as available-for-sale financial assets, a 10% increase in the equity prices at the reporting date would have increased equity by $63,000 (2015: $380,000). For investments classified as fair value through profit or loss, the impact on profit or loss would have been an increase of $1,552,000 (2015: $1,625,000). The analysis is performed on the same basis for 2015. A 10% decrease in equity prices would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant.

Capital management

The Board’s policy is to maintain a sound capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of share capital, reserves, accumulated profits and non-controlling interests of the Group. The Board of Directors monitors the level of dividends to ordinary shareholders.

There were no changes in the Group’s approach to capital management during the year.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

Accounting classifications and fair values

Fair values versus carrying amounts

The carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy, are as follows. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximate of fair value.



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Accounting classifications and fair values (Continued)

During the year ended 31 December 2016, available-for-sale financial assets with a carrying amount of $11,000 (2015: $86,000) were transferred out of Level 3 into Level 1 because the quoted securities held by a venture capital fund was distributed as equity shares directly to the Group. There were no transfers of financial assets from Level 2 to Level 1 during the years ended 31 December 2016 and 31 December 2015.

The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.

Level 3 fair values

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy.


2016 2015$’000 $’000

Group

At 1 January 15,598 14,248Total gains/(losses) recognised in profit or loss 973 (1,511)Total gains recognised in other comprehensive income

– Net change in fair value of equity securities available-for-sale financial assets (2,577) 927

Purchases 1,070 1,990Settlements (1,169) (930)Transfer out of Level 3 (11) (86)Exchange movement 429 960

At 31 December 14,313 15,598

Company

At 1 January – 58Total losses recognised in profit or loss – (58)

At 31 December – –

At 31 December 2016 and 31 December 2015, the Group did not have any liabilities classified in Level 3 of the fair value hierarchy.




Accounting classifications and fair values (Continued)

Level 3 fair values (Continued)

Available-for-sale equity securities in Level 3 of the fair value hierarchy consist of investments in venture capital funds (“VCFs”). Fair values of VCFs are derived based on net asset values (“NAV”) obtained from the Fund Managers as at 31 December 2016. Otherwise, the latest available valuation obtained is adjusted for any capital contributions and distributions where relevant, up to 31 December 2016, to determine the fair values of these venture capital funds as at 31 December 2016.

The underlying assets of the VCFs consist of quoted and unquoted debt and equity securities which are measured at fair value through profit or loss. On a quarterly basis, the VCF fund managers perform a valuation of the portfolio of their respective investments. The fair values of investments in quoted equity and debt securities are determined by reference to their quoted closing bid price in an active market at the measurement date. Fair value of investments in unquoted debt and equity securities are determined by obtaining broker quotes, last round financing price or similar recent transactions in the private market led by a reputable valuer.

Valuation technique Significant unobservable inputs

Inter-relationship between significant unobservable inputs and fair value measurement

NAV Value of the underlying assets (mainly investments) of the VCFs

The estimated fair value would increase/decrease if NAV was higher/lower

For the fair value of Level 3 available-for-sale financial assets, increasing the significant unobservable input by 10% at the reporting date would have increased equity by $1,431,000 (2015: $1,560,000). A 10% decrease in the significant unobservable input would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant.

Sources of estimation uncertainty

Fair values of investments in VCFs are derived based on latest available valuations obtained from the General Partners of the funds, which are determined with reference to net asset value or latest financing price of the funds. Changes in the unobservable inputs used to value the funds would increase/decrease the carrying value of the investments and fair value reserve.

Carrying amounts of unquoted equity securities are stated at cost less impairment losses when the fair values cannot be reliably measured because of variability in the range of reasonable fair value estimates is significant or that investment or probabilities of various estimates within the range cannot be reasonably assessed and used in estimating fair value.



26 MEASUREMENT OF FAIR VALUES

A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Equity securities and debt securities

The fair values of investments in equity and debt securities are determined by reference to their quoted closing bid price in an active market at the measurement date, or where such information is unavailable, based on broker quotes (Level 2 fair values) or determined using a valuation technique. Valuation techniques employed include market multiples and discounted cash flow analysis using contractual or expected future cash flows as applicable, and a market-related discount rate.

Non-derivative financial liabilities

Non-derivative financial liabilities are measured at fair value at initial recognition and for disclosure purposes, at each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the measurement date. For finance leases, the market rate of interest is determined by reference to similar lease agreements.

Other financial assets and liabilities

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) approximate their fair values due to the short period to maturity.

27 OPERATING LEASES

Leases as lessee

At reporting date, the Group and the Company had operating lease commitments for future minimum lease payments under non-cancellable operating leases of warehouse, factory and office space as follows:

Group Company2016 2015 2016 2015$’000 $’000 $’000 $’000

Within one year 2,161 1,815 805 874Between two to five years 3,124 3,778 1,838 2,183More than five years 6,633 7,245 5,551 6,011

11,918 12,838 8,194 9,068



28 CAPITAL COMMITMENTS

As at year end, the Group has commitments amounting to $8,970,000 (2015: $9,872,000) in respect of additional investments in venture capital funds.

As at 31 December 2016, the Group has entered into contracts to purchase property, plant and equipment for $2,816,000 (2015: nil).

29 RELATED PARTIES

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel compensation

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. The directors, department heads and the chief executive officer are considered as key management personnel of the Group.

Key management personnel compensation comprised:

Group2016 2015$’000 $’000

Directors’ fees 263 263Short-term employee benefits:– directors 1,116 1,086– other management personnel 1,250 1,171

2,629 2,520

During the year, the Group received dividends amounting to $150,000 (2015: $500,000) from Ho Bee Cove Pte Ltd, a company in which a substantial shareholder of the Company has interest in.

Other related party transactions

Other than those disclosed elsewhere in the financial statements, the significant transactions with related parties are as follows:

Group2016 2015$’000 $’000

Joint venturesPurchases of finished goods 15,608 13,532



30 CONTINGENCIES

The Company has given formal undertakings, which are unsecured, to provide financial support to its subsidiaries. As at 31 December 2016, the net current liabilities and net liabilities of these subsidiaries amounted to approximately $13,843,000 and $21,252,000 (2015: $20,083,000 and $20,999,000) respectively.

31 SUBSEQUENT EVENT

In January 2017, a subsidiary, R&P (Pte.) Ltd., entered into an agreement to incorporate a joint venture, Kunshan R&P Co., Ltd. The principal activities of the joint venture are those relating to the research and development, manufacturing and distribution of thermoplastic compounds of automotive industry.



1 Directors’ Remuneration – Group and Company

The number of directors in each of the remuneration bands are as follows:

Number of directors2016 2015

$500,001 to $750,000 2 2Below $250,000 3 3

Total 5 5

2 Interested Person Transactions

There were no transactions entered into by the Group with interested persons and their affiliates, as defined in the SGX-ST Listing Manual.

The supplementary information above does not form part of the financial statements.


SUPPLEMENTARYINFORMATION(SGX-ST LISTING MANUAL DISCLOSURE REQUIREMENTS)

SHARE CAPITAL

Issued and fully paid-up Share Capital : S$85,270,272

Class of Shares : Ordinary Shares

Voting Rights excluding treasury shares : one vote for every ordinary share

Number of issued shares excluding treasury shares : 118,573,300

The Company has 129,200 treasury shares as at 14 March 2017.

DISTRIBUTION OF SHAREHOLDINGS

Size of Shareholdings No. of Shareholders % No. of Shares %

1 – 99 39 2.13 816 0.00100 – 1,000 294 16.03 200,274 0.171,001 – 10,000 1,073 58.50 4,520,052 3.8110,001 – 1,000,000 417 22.74 25,195,773 21.251,000,001 and above 11 0.60 88,656,385 74.77

TOTAL 1,834 100.00 118,573,300 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name of Shareholders No. of Shares %

1 AFRO-ASIA INTERNATIONAL ENTERPRISES PTE LIMITED 44,463,000 37.502 AFRO ASIA SHIPPING CO (PTE) LTD 14,270,500 12.043 UOB KAY HIAN PRIVATE LIMITED 13,154,010 11.094 CHUA WEE KENG 5,902,300 4.985 DBS NOMINEES (PRIVATE) LIMITED 2,224,825 1.886 MORPH INVESTMENTS LTD 1,596,500 1.357 NG SOO GIAP OR CHEW SOOI GUAT 1,495,500 1.268 UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 1,444,250 1.229 TAN CHOO SUAN 1,419,000 1.2010 PERFORMANCE INVESTMENT PTE LTD 1,404,000 1.1811 ZEN PROPERTY MANAGEMENT PTE LTD 1,282,500 1.0812 NEW TOWN DEVELOPMENT PTE LTD 826,000 0.7013 LIM CHER KHIANG 771,881 0.6514 SON FONG MENG 756,000 0.6415 CHUA HOONG TAT FRANZ 755,100 0.6416 OCBC NOMINEES SINGAPORE PRIVATE LIMITED 734,000 0.6217 KWOK HAE MENG 714,250 0.6018 LIM & TAN SECURITIES PTE LTD 644,100 0.5419 TAN CHOO HOON @TAN CHENG GAY 636,750 0.5420 CHEN ENYI 620,000 0.52

TOTAL 95,114,466 80.23


AS AT 14 MARCH 2017

STATISTICS OFSHAREHOLDINGS

SHAREHOLDING HELD IN THE HANDS OF PUBLIC

Based on the information provided to the Company as at 14 March 2017, approximately 43.97% of the total number of issued shares of the Company is held by the public. Accordingly, the Company has complied with Rule 723 of the SGX-ST Listing Manual.

SUBSTANTIAL SHAREHOLDERS as at 14 March 2017 as shown in the Company’s Register of Substantial Shareholders

Name of Substantial Shareholder

Direct Interest

No. of Shares

Deemed Interest

No. of SharesTotal Number

of Shares% of Issued

Share Capital

Tan Cheng Gay 636,750 16,500,500(1) 17,137,250 14.45Tan Yok Koon 366,000 15,674,500(2) 16,040,500 13.53Tan Chin Hoon – 16,500,500(3) 16,500,500 13.92Chua Thian Poh 165,000 45,745,500(4) 45,910,500 38.72Ho Bee Holdings (Pte) Ltd – 45,745,500(5) 45,745,500 38.58Afro-Asia International Enterprises Pte. Limited 44,463,000 – 44,463,000 37.50Afro Asia Shipping Co (Pte) Ltd 14,270,500 1,404,000(6) 15,674,500 13.22

Notes:

(1) This represents Mr Tan Cheng Gay’s deemed interest of 16,500,500 shares held in the name of the following:–(a) 14,270,500 shares held by Afro Asia Shipping Co (Pte) Ltd;(b) 1,404,000 shares held by Performance Investment Pte Ltd; and(c) 826,000 shares held by New Town Development Pte. Ltd.

(2) This represents Mr Tan Yok Koon’s deemed interest of 15,674,500 shares held in the name of the following:–(a) 14,270,500 shares held by Afro Asia Shipping Co (Pte) Ltd; and(b) 1,404,000 shares held by Performance Investment Pte Ltd.

(3) This represents Mr Tan Chin Hoon’s deemed interest of 16,500,500 shares held in the name of the following:–(a) 14,270,500 shares held by Afro Asia Shipping Co (Pte) Ltd;(b) 1,404,000 shares held by Performance Investment Pte Ltd; and(c) 826,000 shares held by New Town Development Pte. Ltd.

(4) This represents Mr Chua Thian Poh’s deemed interest of 45,745,500 shares held indirectly by Ho Bee Holdings (Pte) Ltd.

(5) This represents Ho Bee Holdings (Pte) Ltd’s deemed interest of 45,745,500 shares held in the name of the following:–(a) 44,463,000 shares held by Afro-Asia International Enterprises Pte. Limited; and(b) 1,282,500 shares held by Zen Property Management Pte Ltd.

(6) This represents Afro Asia Shipping Co (Pte) Ltd’s deemed interest of 1,404,000 shares held by its wholly-owned subsidiary Performance Investment Pte Ltd.


AS AT 14 MARCH 2017

STATISTICS OFSHAREHOLDINGS

NOTICE IS HEREBY GIVEN that the Annual General Meeting of EnGro Corporation Limited (the “Company”) will be held at

25 International Business Park, German Centre, Stuttgart Room, 5th floor, East Wing, Singapore 609916 on Friday, 28 April

2017 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2016, the Directors’

Statement and Report of the Auditors thereon. (Resolution 1)

2. To declare a first and final tax-exempt (1-tier) dividend of 2.5 cents per ordinary share for the financial year ended

31 December 2016. (Resolution 2)

3(a) To re-elect Mr Tan Cheng Gay who retires pursuant to Article 87 of the Company’s Articles of Association.

(Resolution 3)

3(b) To re-elect Mr Ronnie Teo Heng Hock who retires pursuant to Article 87 of the Company’s Articles of Association.

(Resolution 4)

Mr Ronnie Teo Heng Hock will, upon re-election as a Director of the Company, remain as a member of the Audit

Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore

Exchange Securities Trading Limited.

[See Explanatory Note]

4. To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 5)

AS SPECIAL BUSINESS

5. To approve the payment of Directors’ fees of S$262,500 for the financial year ended 31 December 2016

(2015: S$262,500). (Resolution 6)

6. To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any

modifications:

6.1 Authority to allot and issue shares under the Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option

Scheme (the “ESOS 2000”)

“That authority be and is hereby given to the Directors to allot and issue from time to time such number of ordinary

shares in the Company as may be required to be issued pursuant to the exercise of options under the ESOS 2000,

provided always that the aggregate number of shares to be issued pursuant to the ESOS 2000 shall not exceed fifteen

per centum (15%) of the total issued shares in the capital of the Company excluding treasury shares, from time to time.”

(Resolution 7)


NOTICE OFANNUAL GENERAL MEETING

6.2 Authority to allot and issue shares pursuant to the Share Issue Mandate

“That pursuant to Section 161 of the Companies Act, Chapter 50 and the Listing Rules of the Singapore Exchange

Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the Directors to:–

(A) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise,

and/or

(ii) make or grant offers, agreements or options (collectively “Instruments”) that might or would require

shares to be issued, including but not limited to the creation and issue of (as well as adjustments to)

warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors

may in their absolute discretion deem fit; and

(B) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in

pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(a) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in

pursuance of Instruments made or granted pursuant to this Resolution) does not exceed fifty per centum (50%)

of the total number of issued shares (excluding treasury shares) of the Company (the “Rights Issue Limit”) (as

calculated in accordance with sub-paragraph (b) below), of which the aggregate number of shares to be issued

other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of

Instruments made or granted pursuant to this Resolution) does not exceed twenty per centum (20%) of the

total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with

sub-paragraph (b) below);

(b) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining

the aggregate number of shares that may be issued under sub-paragraph (a) above, the total number of issued

shares (excluding treasury shares) shall be based on the total number of issued shares (excluding treasury

shares) of the Company at the time this Resolution is passed, after adjusting for:–

(i) new shares arising from the conversion or exercise of any convertible securities;

(ii) new shares arising from exercising share options or vesting of share awards outstanding or subsisting

at the time this Resolution is passed, provided the options or awards were granted in compliance with

the provisions of the Listing Manual of the SGX-ST; and

(iii) any subsequent bonus issue, consolidation or subdivision of shares;

(c) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the

Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the

SGX-ST) and the Articles of Association for the time being of the Company;



(d) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall

continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by

which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier;

or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this

Resolution, until the issuance of such shares in accordance with the terms of the Instruments; and

provided further that notwithstanding the Rights Issue Limit set out in sub-paragraph (a) above, but subject always to

any applicable regulations as may be prescribed by the SGX-ST, the Rights Issue Limit and accordingly the authority

conferred thereunder, shall be increased to 100% of the total number of issued shares (excluding treasury shares) of

the Company (the “Enhanced Rights Issue Limit”) (as calculated in accordance with sub-paragraph (b) above) for such

purpose, on such renounceable basis and on such other conditions as may be prescribed in Practice Note 8.3 of the

Listing Manual of SGX-ST (as such Practice Note may be amended, varied, supplemented or replaced from time to

time) in respect of such Enhanced Rights Issue Limit. (Resolution 8)

6.3 Authority to grant options and to allot and issue shares under with the EnGro Corporation Limited 2011 Employees’

Share Option Scheme (the “ESOS 2011”)

“That authority be and is hereby given to the Directors of the Company to offer and grant options in accordance with

the provisions of the ESOS 2011 and to allot and issue from time to time such number of ordinary shares in the capital

of the Company as may be required to be issued pursuant to the exercise of options under the ESOS 2011, whether

granted during subsistence of this authority or otherwise, provided always that the aggregate number of new shares

to be allotted and issued pursuant to the ESOS 2011 and other share based schemes of the Company (which shall

include the ESOS 2000 and the EnGro Performance Share Award Scheme) shall not exceed fifteen per centum (15%)

of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.”

(Resolution 9)

6.4 Authority to issue shares under the EnGro Performance Share Award Scheme (the “EnGro PSA Scheme”)

“That authority be and is hereby given to the Directors of the Company to allot and issue from time to time such

number of fully paid-up shares as may be required to be allotted and issued pursuant to the vesting of awards under

the EnGro PSA Scheme, whether granted during subsistence of this authority or otherwise, provided always that the

aggregate number of shares to be allotted and issued pursuant to the EnGro PSA Scheme and other share based

schemes (including the ESOS 2000 and ESOS 2011) of the Company shall not exceed fifteen per centum (15%) of the

total number of issued shares (excluding treasury shares) in the capital of the Company from time to time.”

(Resolution 10)

6.5 Proposed Renewal of the Share Purchase Mandate

“That:

(a) for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 of Singapore (the “Act”), the

exercise by the directors of all the powers of the Company to purchase or otherwise acquire from time to time

issued ordinary shares in the capital of the Company (the “Shares”), not exceeding in aggregate the Prescribed

Limit (as hereinafter defined), at such price or prices as may be determined by the directors from time to time

up to the Maximum Price (as hereinafter defined), whether by way of:–

(i) on-market purchases (each a “Market Purchase”) on the SGX-ST; and/or



(ii) off-market purchases (each an “Off-Market Purchase”) effected in accordance with any equal access

scheme(s) as may be determined or formulated by the Directors as they may consider fit, which

scheme(s) shall satisfy all the conditions prescribed by the Act,

and otherwise in accordance with all other laws and regulations and rules of the SGX-ST as may for the time being be

applicable, be and is hereby authorised and approved generally and unconditionally (the “Share Purchase Mandate”);

(b) unless varied or revoked by the Company in general meeting, the authority conferred on the Directors pursuant

to the Share Purchase Mandate may be exercised by the Directors at any time and from time to time during the

period commencing from the date of the passing of this Ordinary Resolution, and expiring on the earlier of:–

(i) the date on which the next annual general meeting of the Company is held; or

(ii) the date by which the next annual general meeting of the Company is required by law to be held; or

(iii) the date on which the purchases of Shares by the Company pursuant to the Share Purchase Mandate

are carried out to the full extent mandated;

(c) in this Resolution:–

“Prescribed Limit” means 10% of the total number of issued ordinary shares of the Company as at the date

of the passing of this Resolution, unless the Company has effected a reduction of the share capital of the

Company in accordance with the applicable provisions of the Companies Act, at any time during the Relevant

Period, in which event the total number of issued ordinary shares of the Company shall be taken to be the

number of issued ordinary shares of the Company as altered (excluding any treasury shares that may be held

by the Company from time to time). Any Shares which are held as treasury shares will be disregarded for the

purpose of computing the 10% limit;

“Relevant Period” means the period commencing from the date on which the last annual general meeting was

held and expiring on the date the next annual general meeting is held or required by law to be held, whichever

is the earlier, after the date of this Resolution; and

“Maximum Price” in relation to a Share to be purchased, means an amount (excluding brokerage, stamp

duties, commission, applicable goods and services tax and other related expenses) not exceeding:–

(i) in the case of a Market Purchase, 105% of the Average Closing Price; and

(ii) in the case of an Off-Market Purchase, 120% of the Average Closing Price,

where:–

“Average Closing Price” means the average of the closing market prices of a Share over the last 5 Market

Days (“Market Day” being a day on which the SGX-ST is open for securities trading), on which transactions

in the Shares were recorded, before the day on which the Market Purchase was made or, as the case may

be, before the date of making an announcement by the Company of an offer for an Off-Market Purchase, and

deemed to be adjusted for any corporate action that occurs after the relevant 5 Market Days; and



(d) the Directors of the Company and/or any of them be and are hereby authorised to complete and do all such

acts and things as they and/or he may consider necessary, desirable, expedient, incidental or in the interests

of the Company to give effect to the transactions contemplated and/or authorised by this Resolution.”

(Resolution 11)

7. To transact any other business that may properly be transacted at an Annual General Meeting.

NOTICE OF BOOK CLOSURE DATE FOR DIVIDEND

NOTICE IS ALSO HEREBY GIVEN that, subject to the approval of shareholders being obtained at the Annual General

meeting of the Company for the payment of the first and final tax-exempt (1-tier) dividend, the Share Transfer Books and the

Register of Members of the Company will be closed on 26 May 2017 for the preparation of dividend warrants. Duly completed

transfers received by the Company’s Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place,

#32-01 Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 25 May 2017 will be registered to determine

shareholders’ entitlement to the proposed dividends. The first and final tax-exempt (1-tier) dividend of 2.5 cents per ordinary

share for the financial year ended 31 December 2016, if approved at the Annual General Meeting, will be paid on 9 June 2017.

By Order of the Board

Joanna Lim

Company Secretary

13 April 2017

EXPLANATORY NOTE

In relation to Ordinary Resolutions 3 and 4 proposed in items 3(a) and 3(b) above, the detailed information on Mr Tan Cheng

Gay and Mr Ronnie Teo Heng Hock are set out in the section entitled “Directors Profile” and Table 3 in the Corporate

Governance Report of the Company’s 2016 Annual Report.

Mr Tan Cheng Gay is the brother of Mr Tan Yok Koon (a Director and substantial shareholder of the Company) and Mr Tan

Chin Hoon (a substantial shareholder of the Company).

There are no relationships (including immediate family relationships) between Mr Ronnie Teo Heng Hock and the other directors,

the Company or its 10% shareholders.



STATEMENT PURSUANT TO ARTICLE 57(3) OF THE COMPANY’S ARTICLES OF ASSOCIATION

The effect of the resolutions under the heading “Special Business” in this Notice of Annual General Meeting are:–

Ordinary Resolution 6

Resolution 6 is to approve the payment of Directors’ fees for the financial year ended 31 December 2016.


Resolution 7 proposed in item 6.1 above, if passed, will authorise the Directors of the Company from the date of the above

Meeting until the next Annual General Meeting to issue shares in the Company pursuant to the exercise of options granted

under the “ESOS 2000”, provided that the aggregate number of shares to be issued does not exceed 15% of the issued share

capital of the Company from time to time. Note that the ESOS 2000 was at the end of its 10-year duration and discontinued

on 15 January 2011. However, subsisting options granted prior to that date are not affected by the discontinuation and remain

exercisable in accordance with the rules of the ESOS 2000. This authority will, unless revoked or varied at a general meeting,

expire at the next Annual General Meeting of the Company.


Resolution 8 proposed in item 6.2 above, if passed, will empower the Directors from the date of this Meeting until the date of

the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held or when

varied or revoked by the Company in general meeting, whichever is the earlier, to issue shares and convertible securities in

the Company. The number of shares and convertible securities that the Directors may issue under this Resolution would not

exceed Rights Issue Limit, ie 50% of the total number of issued shares (excluding treasury shares) of the Company at the time

of the passing of this Resolution, or the Enhanced Rights Issue Limit, ie 100% of the total number of issued shares (excluding

treasury shares) of the Company at the time of the passing of this Resolution where the Company meets the requirements

for such Enhanced Rights Issue Limit prescribed in Practice Note 8.3 of the Listing Manual of SGX-ST. For issue of shares

and convertible securities other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible

securities to be issued shall not exceed 20% of the total number of issued shares (excluding treasury shares) of the Company.

The aggregate number of shares which may be issued shall be based on the total number of issued shares (excluding treasury

shares) of the Company at the time that Ordinary Resolution 8 is passed, after adjusting for (a) new shares arising from the

conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or

subsisting at the time that Ordinary Resolution 9 is passed, and (b) any subsequent bonus issue or consolidation or subdivision

of shares. The Enhanced Rights Issue Limit widens fund-raising avenues available to the Company, thereby enabling it to

respond to financing needs to meet on-going changes and challenges in the business environment in more expedient and

cost-efficient manner. The Directors are therefore of the view that the Enhanced Rights Issue Limit is in the interest of the

Company and its shareholders.



Meeting until the next Annual General Meeting to grant options under the ESOS 2011 which was approved at the Extraordinary

General Meeting of the Company on 27 April 2011 and to allot and issue shares upon the exercise of such options granted

under the ESOS 2011 in accordance with the rules of the ESOS 2011. This authority will, unless revoked or varied at a general

meeting, expire at the next Annual General Meeting of the Company.





Meeting until the next Annual General Meeting to issue shares in the Company pursuant to the vesting of awards under the

EnGro PSA Scheme which was approved at the Extraordinary General Meeting of the Company on 27 April 2011 in accordance

with the rules of the EnGro PSA Scheme. This authority will, unless revoked or varied at a general meeting, expire at the next

Annual General Meeting of the Company.


Resolution 11 proposed in item 6.5 above, if passed, will empower the Directors of the Company to repurchase ordinary shares

of the Company by way of market purchases or off-market purchases of up to 10% of the total number of issued shares

(excluding treasury shares) in capital of the Company at the Maximum Price. The rationale for, the authority and limitation on,

the sources of funds to be used for the purchase or acquisition including the amount of financing and the financial effects

of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited

consolidated financial statements of the Company and its subsidiaries for the financial year ended 31 December 2016 are set

out in greater detail in the Addendum in relation to the proposed renewal of the Share Purchase Mandate.

Notes:

(1) A member of the Company (other than a depository agent) entitled to attend and vote at the Meeting may appoint not

more than two proxies to attend and vote in his/her stead.

(2) A proxy need not be a member of the Company.

(3) Pursuant to Section 181 of the Companies Act, Chapter 50 of Singapore, any member who is a relevant intermediary

is entitled to appoint one or more proxies to attend, speak and vote at the Annual General Meeting. Where such

member’s form of proxy appoints more than one proxy, the proportion of his shareholding concerned to be represented

by each proxy shall be specified in the form of proxy. Relevant intermediary is either:

(a) a banking corporation licensed under the Banking Act (Cap. 19) or its wholly-owned subsidiary which provides

nominee services and holds shares in that capacity;

(b) a capital markets services licence holder which provides custodial services for securities under the Securities

and Futures Act (Cap. 289) and holds shares in that capacity; or

(c) the Central Provident Fund (“CPF”) Board established by the Central Provident Fund Act (Cap. 36), in respect

of shares purchased on behalf of CPF investors.

(4) If the appointer is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or

attorney.



(5) An investor who buys shares using CPF monies (“CPF Investor”) and/or SRS monies (“SRS Investor”) (as may be

applicable) may attend and cast his vote(s) at the Meeting in person. CPF and SRS Investors who are unable to attend

the Meeting but would like to vote, may inform their CPF and/or SRS Approved Nominees to appoint the Chairman

of the Meeting to act as their proxy, in which case, the CPF and SRS Investors shall be precluded from attending the

Meeting.

(6) The instrument appointing a proxy must be deposited at the registered office of the Company at 29 International

Business Park, #08-05/06 Acer Building Tower B, Singapore 609923 not later than 48 hours before the time appointed

for holding the Meeting.

Personal data privacy:

By submitting a proxy form appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual General

Meeting (“AGM”) and/or any adjournment thereof, a shareholder of the Company (i) consents to the collection, use and

disclosure of the shareholder’s personal data by the Company (or its agents or service providers) for the purpose of the

processing, administration and analysis by the Company (or its agents or service providers) of proxies and representatives

appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists,

minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its

agents or service providers) to comply with any applicable laws, listing rules, take-over rules, regulations and/or guidelines

(collectively, the “Purposes”), (ii) warrants that where the shareholder discloses the personal data of the shareholder’s

proxy(ies) and/or representative(s) to the Company (or its agents or service providers), the shareholder has obtained the prior

consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents or

service providers) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the

shareholder will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a

result of the shareholder’s breach of warranty.



This page has been intentionally left blank

ENGRO CORPORATION LIMITED(Company Registration No.: 197302229H)(Incorporated in the Republic of Singapore)

PROXY FORM

Important:1. A relevant intermediary may appoint more than two proxies to

attend, speak and vote at the Annual General Meeting. (please see note 3 for the definition of “relevant intermediary”).

2. For investors who have used their CPF/SRS monies to buy shares in the Company, this form of proxy is not valid for use and shall be ineffective for all intents and purposes if used or purported to be used by them. CPF/SRS investors should contact their respective Agent Banks/SRS Operators if they have any queries regarding their appointment as proxies.

*I/We,

of being *a member/members of EnGro Corporation Limited (the “Company”), hereby appoint:

Name Address NRIC/Passport No.

Proportion of Shareholding(s) (%)

*and/or

or failing whom, the Chairman of the Meeting, as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting (“AGM”) of the Company to be held at 25 International Business Park, German Centre, Stuttgart Room, 5th floor, East Wing, Singapore 609916 on Friday, 28 April 2017 at 10.00 a.m. and at any adjournment thereof. The *proxy is/proxies are to vote for or against the Resolutions to be proposed at the AGM as indicated hereunder. If no specific direction as to voting is given, the *proxy/proxies will vote or abstain from voting at *his/their discretion, as *he/they will on any other matter arising at the Meeting:–

Ordinary Resolutions For Against

Resolution 1 To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2016, the Directors’ Statement and the Report of the Auditors thereon.

Resolution 2 To declare a first and final tax-exempt (1-tier) dividend of 2.5 cents per ordinary share for the financial year ended 31 December 2016.

Resolution 3 To re-elect Mr Tan Cheng Gay (Retiring under Article 87).

Resolution 4 To re-elect Mr Ronnie Teo Heng Hock (Retiring under Article 87).

Resolution 5 To re-appoint Messrs KPMG LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.

Resolution 6 To approve the payment of Directors’ fees of S$262,500 for the financial year ended 31 December 2016 (2015: S$262,500).

Resolution 7 To authorise Directors to allot and issue shares pursuant to the exercise of options granted under Ssangyong Cement (Singapore) Limited 2000 Employees’ Share Option Scheme.

Resolution 8 To authorise the Directors to allot and issue shares pursuant to the Share Issue Mandate.

Resolution 9 To authorise Directors to grant options and to allot and issue shares under EnGro ESOS 2011.

Resolution 10 To authorise Directors to issue shares under the EnGro PSA Scheme.

Resolution 11 To approve the Proposed Renewal of the Share Purchase Mandate.

Please indicate with a tick [√] in the space provided whether you wish your vote to be cast for or against the Resolutions as set out in the Notice of the Meeting.

Dated this day of 2017Total Number of Shares Held

Signature(s) of Member(s)/Common Seal

* Delete where applicable

Notes:–

1. A member of the Company (other than a depository agent) entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. Such proxy need not be a member of the Company.

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each such proxy.

3. Pursuant to Section 181 of the Companies Act, Chapter 50 of Singapore, any member who is a relevant intermediary is entitled to appoint one or more proxies to attend, speak and vote at the Annual General Meeting. Where such member’s form of proxy appoints more than one proxy, the proportion of his shareholding concerned to be represented by each proxy shall be specified in the form of proxy. Relevant intermediary is either:

(a) a banking corporation licensed under the Banking Act (Cap. 19) or its wholly-owned subsidiary which provides nominee services and holds shares in that capacity;

(b) a capital markets services licence holder which provides custodial services for securities under the Securities and Futures Act (Cap. 289) and holds shares in that capacity; or

(c) the Central Provident Fund (“CPF”) Board established by the Central Provident Fund Act (Cap. 36), in respect of shares purchased on behalf of CPF investors.

4. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or duly authorised officer.

5. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore.

6. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at 29 International Business Park, #08-05/06 Acer Building Tower B, Singapore 609923 not later than 48 hours before the time set for the Annual General Meeting.

7. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 81SF of the Securities Futures Act, Chapter 289 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 72 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.

9. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat unless his name appears on the Depository Register 72 hours before the time set for the Annual General Meeting.

10. An investor who buys shares using CPF monies (“CPF Investor”) and/or SRS monies (“SRS Investor”) (as may be applicable) may attend and cast his vote(s) at the Meeting in person. CPF and SRS Investors who are unable to attend the Meeting but would like to vote, may inform their CPF and/or SRS Approved Nominees to appoint the Chairman of the Meeting to act as their proxy, in which case, the CPF and SRS Investors shall be precluded from attending the Meeting.

Personal data privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 13 April 2017.

Fold along this line

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The Company Secretary

ENGRO CORPORATION LIMITED29 International Business Park

#08-05/06 Acer Building Tower B

Singapore 609923

Please

Affix

Postage

Stamp

01 CORPORATE PROFILE

02 CHAIRMAN’S MESSAGE

04 DIRECTORS’ PROFILES

05 MANAGEMENT TEAM

06 CORPORATE STRUCTURE

07 REGIONAL FOOTPRINT

08 SINGAPORE & MALAYSIA: INTEGRAL CEMENT & READY-MIX CONCRETE

12 CHINA: SPECIALTY CEMENT

19 SINGAPORE & CHINA: SPECIALTY POLYMER

20 INVESTMENTS

21 CORPORATE SOCIAL RESPONSIBILITY

22 FINANCIAL HIGHLIGHTS

23 CORPORATE GOVERNANCE REPORT

43 FINANCIAL CONTENTS




PROXY FORM

TABLE OF CONTENTS

REGISTERED OFFICE29 International Business Park#08-05/06 Acer Building Tower BSingapore 609923Tel: +65-65617978Fax: +65-65619770

SHARE REGISTRARBoardroom Corporate & Advisory Services Pte Ltd50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

AUDITORSKPMG LLPPublic Accountants and Chartered Accountants16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581

PARTNER-IN-CHARGELow Gin Cheng, Gerald (with effect from FY2016)

COMPANY SECRETARYJoanna Lim Lan Sim

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ENGRO CORPORATION LIMITEDANNUAL REPORT 2016

SUSTAINABILITY AND BEYOND

ENGRO CORPORATION LIMITEDCOMPANY NO. 197302229H

29 INTERNATIONAL BUSINESS PARK

#08-05/06 ACER BUILDING TOWER B

SINGAPORE 609923

T +65 6561 7978

F +65 6561 9770

Documents

ENGRO CORPORATION LIMITED SUSTAINABILITY AND BEYONDEnGro’s desire to expand globally. Today, EnGro is a leading player with more than 40 years of experience providing innovative,